As a result of moral hazard
A. both physicians and hospitals order more procedures.
B. patients increasingly have to worry about the expense of operations and other medical procedures.
C. physicians and hospital administrators have no incentive to raise costs.
D. both physicians and hospitals have a financial interest in trying to keep hospital costs down.
Answer: A
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If you save more because Social Security motivates you to provide a greater level of inheritance for your children, then this is referred to by economists as the
A. slovenly effect. B. bequest effect. C. asset substitution effect. D. induced retirement effect.
Answer the next question based on the following list of items that are related to aggregate demand and/or aggregate supply. 1) Government Spending2) Consumer Expectations3) Degree of Excess Capacity4) Personal Income Tax Rates5) National Income Abroad6) Business Taxes7) Domestic Resource Availability8) Prices of Imported Products9) Profit Expectations on InvestmentsWhich combination of factors best explain why the aggregate supply curve would shift?
A. 1 and 2 B. 2 and 9 C. 6 and 7 D. 3 and 5
Purchasing power parity:
A. allows us to compare the cost of living across different locations. B. is the theory that purchasing power in different countries should be the same when stated in local currencies. C. almost always holds in reality. D. All of these statements are true.
The effect of a change in price on the quantity bought while keeping the consumer on the same indifference curve, is called the
A) price effect. B) income effect. C) substitution effect. D) real effect.