Economically speaking, the design of Medicare
A. helps to decrease the cost of care to non-Medicare patients.
B. discourages the provision of medical services.
C. encourages the consumption of medical services.
D. discourages the consumption of medical services.
Answer: C
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What is the United States government's formal definition of the poverty line?
A) It is a level of annual income equal to total income in society divided by the population, adjusted for a family of four. B) It is the annual income level below which a household is exempt from taxes. C) It is a level of annual income equal to the amount of money necessary to purchase the minimal quantity of food required for adequate nutrition. D) It is a level of annual income equal to three times the amount of money necessary to purchase the minimal quantity of food required for adequate nutrition.
A manager believes there is a 10 percent chance their firm will have to pay $1,000,000 and a 90 percent chance they will be found innocent and pay nothing except the legal fees of $200,000. If the manager is offered a settlement deal of $300,000 (the manager's firm would pay the plaintiff $300,000), and the manager flips a coin to decide if they should settle or not, which of the following
statements is true? A) The manager is risk averse. B) The manager is risk neutral. C) The manager is a risk lover. D) The manager is risk intolerant.
Suppose a price floor is set by the government above the market equilibrium price. Which of the following will result?
a. There will be a surplus. b. The quantity demanded will exceed the quantity supplied. c. The demand curve will shift to the left. d. None of these.
How does a competitive market compare to a monopoly that engages in perfect price discrimination?
a. In both cases, total social welfare is the same. b. Total social welfare is higher in the competitive market than with the perfectly price discriminating monopoly. c. In both cases, some potentially mutually beneficial trades do not occur. d. Consumer surplus is the same in both cases.