The major economic effect of Medicare subsidies is
A) that the number of physicians has decreased since compensation is low.
B) to increase the price of medical services and reduce the quantity demanded.
C) to increase the price of medical services and increase the quantity demanded.
D) to lower the price of medical services and reduce the quantity demanded.
Answer: C
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Equations for C, I, G, and NX are given below. If the equilibrium level of GDP is $32,000, what is the marginal propensity to consume?
C = 5,000 + (MPC)Y I = 1,500 G = 2,000 NX = -500 A) 0.67 B) 0.75 C) 0.8 D) 0.9
In the relevant price range a demand curve for a Giffen good would be
A) upward sloping. B) downward sloping. C) horizontal. D) vertical.
Which of the following is true about present day Americans who are at the official poverty level?
a. Their incomes are about the same as the average per capita income in most of the developed nations of the world.. b. Their incomes are about half of the average world income. c. Their incomes are far higher than the average per capita income in most of the rest of the world. d. Their incomes are almost equal to the average income of people in nations like China, India, and Pakistan.
Comparing a tariff levied on an import where the home firm is a monopoly to a situation where the home firms are competitive, we find:
a. the exact same result—both firms charge world price + tariff and both firms produce Q where MC = MR = world price + tariff. b. that the monopoly firm will be able to charge a higher price and limit its quantity. c. that the competitive firm will not be able to survive the impact of the tariff. d. that quantity is not the issue; the monopoly firm will pay its workers less and earn higher profits.