All of the following are designed to reduce health care expenses for consumers except:
A. HMOs.
B. PPOs.
C. the DRG payment system.
D. the fee-for-service system.
Answer: D
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The long-run average cost curve of a natural monopoly
A) is positively sloped until it crosses the demand curve. B) intersects the demand curve while it is negative sloped. C) intersects the demand curve while it is positively sloped. D) is the natural monopoly's supply curve. E) is the same as the natural monopoly's demand curve.
Decreasing marginal returns
A) can be avoided if a firm watches costs. B) affect all firms, but at different production levels. C) affect all firms at the same level of production. D) disappear when the firm produces a large enough level of output. E) mean that the average product of labor starts as a negative number and then becomes positive.
If a cartel firm is producing a quantity at which the marginal revenue is $4 and the marginal cost is $4, the firm ________.
A) is producing less than the agreed upon quantity B) is producing the agreed upon quantity C) has erected a barrier to entry D) has acted in self-interest
The circular flow model shows the relationships between
A. government and business firms. B. government and households.