Figure 11-4
Physicians have two types of patients: private patients who pay directly or with insurance, and Medicaid patients whose care is paid for by the state. Physicians must lower prices to attract more private patients, but they can add unlimited Medicaid patients at a constant price. The situation facing Dr. Casey is depicted in Figure 11-4. Units of medical service (say, number of patients x number of visits) are measured on the horizontal axis. How many units of medical service will Dr. Casey deliver to Medicaid patients?
a.
OA
b.
AC
c.
OC
d.
OD
b
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The classical theory of aggregate supply where markets are perfectly flexible
a. may or may not be compatible with the Keynesian system. b. is easily added the IS-LM framework of aggregate demand. c. is fundamentally incompatible with the Keynesian system. d. is consistent with the IS-LM framework if all shocks are to the IS curve. e. none of the above.
Jim has estimated elasticity of demand for gasoline to be -0.7 in the short-run and -1.8 in the long run. A decrease in taxes on gasoline would: a. lower tax revenue in both the short and long run. b. raise tax revenue in both the short and long run
c. raise tax revenue in the short run but lower tax revenue in the long run. d. lower tax revenue in the short run but raise tax revenue in the long run.
Relative to a profit-maximizing monopolized industry that is producing 8,000 units of output at a price of $10 per unit, a competitively organized industry under the same circumstances would produce ________ units of output and charge a price of ________ per unit.
A. 8,000; $10 B. less than 8,000; less than $10 C. less than 8,000; more than $10 D. more than 8,000; less than $10
rate is interpreted as the percentage of the:
A. Adult population who are unemployed B. Labor force that are not employed C. Able-bodied population who are not working D. Work force that have been laid off