Health care costs rose more than 10 percent in 2011, according to a survey of insurers by Aon Consulting Worldwide. If the increase in costs solely comes from increased wages to nurses and doctors, then for the health care industry
A) variable costs are increasing.
B) fixed costs are increasing.
C) long run average total cost is decreasing.
D) productivity is increasing.
A
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If price equals average total cost at the profit-maximizing output level, then in the short run,
a. profit is positive b. profit is negative c. the firm will go out of business d. the firm will earn zero profit e. the firm's supply curve is horizontal
The fallacy in the strict crowding-out argument comes from supposing that
a. the Federal Reserve always accommodates the U.S. Treasury in its financing of the deficit. b. corporations always outbid small businesses for government contracts. c. the economy's flow of saving is fixed. d. investors will spend more when G increases.
Suppose the United States is going into a recession. To prevent the recession from worsening, the United States could do all the following except asking:
A. the European Union to adopt a more contractionary monetary policy. B. Japan to adopt a more expansionary fiscal policy. C. China to reduce trade barriers to U.S. exports. D. Japan to adopt policies that reduce its trade surplus with the United States.
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C