Which of the following statements is true about health care costs in the United States?
A. Costs have risen because increases in the price of health care have more than offset
reductions in the quantity of health care provided.
B. Costs have risen because increases in the quantity of care provided have more than offset
price reductions realized through economies of scale.
C. Costs have risen because both the price of health care and the quantity provided have
risen.
D. Costs have remained relatively stable as price increases have been largely offset by
reductions in the quantity provided.
Answer: C
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Stagflation is the combination of
A) inflation and increasing real GDP. B) deflation and recession. C) inflation and recession. D) deflation with increasing real GDP.
If the marginal cost were $12, how many units of output would this firm produce?
A. 1
B. 2
C. 3
D. 4
Suppose current sales increase by $100 million. Investment theory suggests that current investment must
A) decrease exactly by $100 million. B) increase by exactly $100 million. C) increase by less than $100 million. D) decrease, but by less than $100 million. E) none of the above
Sam is suing someone in court for $10,000. The probability that Sam will lose the case is 1/h where h is the number of hours that Sam's attorney works on the case. The lawyer charges $500 per hour if he is to be paid hourly, or he requests 20% of the settlement if he is to be paid on a contingency basis. Assuming both Sam and the attorney are risk-neutral wealth maximizers, is either contract
efficient? What will be an ideal response?