Use the concept of supply and demand to explain why an increase in Medicare subsidies can lead to an increase in health care spending by the government
What will be an ideal response?
Medicare reduces the price that the elderly people have to pay for health services, so that an increase in the subsidy will lead to an increase in the quantity demanded of health services. As a result, the government ends up paying more in total health care spending.
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All of the following have been proposed as reasons for an unusually high level of uncertainty following the financial crisis of 2007-2009 EXCEPT:
A) the severity of the financial crisis B) concerns of small businesses regarding how the Affordable Care Act would affect the cost of hiring workers C) concerns by households and firms regarding potential tax increases and spending cuts scheduled to take place in January 2013 D) the Fed indicating that it would withdraw stimulus as soon as there was any evidence of economic recovery
In the Malthusian model, state-mandated population control policies are likely to
A) decrease the equilibrium size of the population and increase the equilibrium level of consumption per worker. B) decrease the equilibrium size of the population and have no effect on the equilibrium level of consumption per worker. C) have no effect on the equilibrium size of the population and increase the equilibrium level of consumption per worker. D) have no effect on either the equilibrium size of the population or the equilibrium level of consumption per worker.
If the marginal utilities are constant for travel and food and the marginal utility per dollar of travel is 50 and the marginal utility per dollar of food is 30:
A. we can gain 20 units of net utility by spending one more dollar on food and one less dollar on travel. B. we can gain 20 units of net utility by spending one less dollar on food and one more dollar on travel. C. the total utility of food and travel is 80. D. we can gain 30 units of net utility by spending one less dollar on food and one more dollar on travel.
To operate efficiently, an economy generally "needs" ________ unemployment
A) structural B) cyclical C) seasonal D) frictional