The RAND Health Insurance Study
a. examined cross-section data to estimate the demand function for medical care.
b. was the most extensive controlled experiment in health insurance ever conducted in the United States.
c. like most economic studies, was based on individual decisions in voluntarily choosing health insurance coverage.
d. was flawed due to severe self-selection bias.
e. was set up to study medical outcomes when individuals were free to choose the type of health coverage they desired.
B
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Give a complete but concise definition of the following terms. a. perfect competition b. perfectly competitive firm's demand curve c. shutdown point d. long-run equilibrium in perfect competition
What will be an ideal response?
When large firms in oligopoly markets cut their prices
A) we don't know for sure how rival firms will respond. B) rival firms will also cut their prices to avoid losing sales. C) rival firms will not change their prices because most of their customers have signed contracts that commit them to doing business with the same firms for the life of their contracts. D) rival firms will not cut their prices because they fear that the federal government will accuse them of collusion.
Suppose a production function is q = K1/2L1/3 and in the short run capital (K) is fixed at 100 . If the wage is $10 and the rental rate on capital is $20, the fixed cost is
a. $2,000 b. $200 c. $20,000 d. $0
Sugar and honey are viewed as substitutes for each other in many cooking applications. If the price of sugar rises, we would expect
a. the demand for honey to increase
b. the demand for honey to decrease
c. the quantity demanded of honey to decrease
d. the price of honey to decrease
e. the quantity demanded of honey to increase