Question 1

The relationship between the value and price of a stock suggests that:

Accepted Answer

A)  the equilibrium price of a stock strikes a balance between those who think the stock is worth more and those who think it's worth less at the current price.
B)  it is the market's best guess regarding the expected value of the company's future profits.
C)  stocks are overvalued.
D)  both A and B are true.E) A) and D)
F) A) and B)

Question 2

Which of the following would lead to an increase in the demand for health care?

Accepted Answer

A)  Physicians' productivity increases.
B)  Medicare subsidies are lowered.
C)  The average population age increases.
D)  Subsidies for Medicare are reduced.E) B) and C)
F) None of the above

Question 3

If the government sets out to help low-income people by establishing a maximum amount for rent:

Accepted Answer

A)  a price floor has been set and a shortage of rental units may occur.
B)  a price ceiling has been set and a shortage of rental units may occur.
C)  in the long run more rental units will appear.
D)  poor people will definitely be helped.E) None of the above
F) A) and B)

Question 4

A price that the government guarantees farmers will receive for a particular crop is a(n) :

Accepted Answer

A)  price ceiling.
B)  price support.
C)  deficiency price.
D)  export price.E) A) and D)
F) None of the above

Question 5

In agriculture during the last several decades:

Accepted Answer

A)  supply has shifted greatly to the left due to technological advances.
B)  demand for agricultural products has decreased.
C)  prices of agricultural output have fallen.
D)  all of the above are true.E) A) and B)
F) A) and C)

Question 6

A market price support policy attempts to assist the farm industry by:

Accepted Answer

A)  taxing the incomes of farmers.
B)  directly subsidizing the incomes of farmers.
C)  establishing price floors in farm output markets.
D)  reducing the amount of resources used in farm production.E) All of the above
F) A) and B)

Question 7

Price controls:

Accepted Answer

A)  always increase economic efficiency.
B)  always lead to more equitable results.
C)  can result in inequitable outcomes.
D)  all of the above statements are true.E) A) and B)
F) None of the above

Question 8

The market for health care is characterized by which of the following?

Accepted Answer

A)  significant third-party payments
B)  a falling fraction of the total cost the consumers of health care actually pay
C)  dramatic increases in costs because of technological advances in medical care
D)  all of the aboveE) A) and B)
F) A) and C)

Question 9

Health-care spending as a percentage of total U.S.output generally rose between 1960 and 1995.

Accepted Answer

A) True 
 B)False

Question 10

An area of concern in the provision of health care in the United States is that:

Accepted Answer

A)  health care prices are not high enough.
B)  too many resources are devoted to health care.
C)  physicians have no control over prices.
D)  everyone has an excessive amount of insurance.E) None of the above
F) All of the above

Question 11

The equilibrium price in a market is established subject to the all other things unchanged condition and, therefore, very well may change due to:

Accepted Answer

A)  a change in the price of the good.
B)  a change in the quantity of the good.
C)  a change in the price of resource inputs used to produce the good.
D)  any of the above.E) B) and D)
F) A) and B)

Question 12

Which of the following is a demand factor in the health-care market?

Accepted Answer

A)  productivity in health care.
B)  treatment decisions of doctors.
C)  changes in health care technology.
D)  All of the above are demand factors.E) B) and D)
F) B) and C)

Question 13

In 1997, the health-care system in the United States accounted for about _______ percent of total output.

Accepted Answer

A)  5
B)  13
C)  30
D)  40E) A) and B)
F) A) and C)

Question 14

In addition to setting prices, the government has attempted to help farmers by:

Accepted Answer

A)  restricting output.
B)  essentially paying them not to produce.
C)  creating some surpluses, buying them, and also restricting output.
D)  doing all of the above.E) C) and D)
F) None of the above

Question 15

During the Great Depression:

Accepted Answer

A)  agriculture was hit particularly hard.
B)  prices received by farmers rose by nearly 2/3 between 1930 and 1933.
C)  farm legislation in the 1930s sought to reduce the number of farms and farm income.
D)  all of the above are true.E) All of the above
F) C) and D)

Question 16

Which of the following statements concerning insurance for health-care services is true?

Accepted Answer

A)  Most workers purchase their own insurance.
B)  State governments are the providers of Medicare and Medicaid.
C)  In the United States, only private firms provide health insurance.
D)  Subscribers to insurance plans may pay a small percentage of the cost of the health care they consume.E) B) and C)
F) A) and D)

Question 17

In terms of equity, existing farm policies tend to help:

Accepted Answer

A)  all farmers equally.
B)  none of the farmers.
C)  poor farmers more than wealthy farmers.
D)  wealthy farmers more than poor farmers.E) B) and D)
F) A) and C)

Question 18

Insurance companies have addressed the high costs of health care by:

Accepted Answer

A)  seeking to shift the demand curve to the left.
B)  limiting patients choices in consuming health care.
C)  restricting the doctors patients may select.
D)  all of the above.E) A) and B)
F) A) and C)

Question 19

Those things held unchanged when an equilibrium price is established:

Accepted Answer

A)  are called demand shifters if a change in one (or more) of them would change demand.
B)  include only supply shifters.
C)  seldom change, and therefore prices and quantity in most markets are remarkably stable.
D)  never change, by definition.E) None of the above
F) B) and D)

Question 20

An area of concern in the provision of health care in the United States is that:

Accepted Answer

A)  health-care costs and spending are too high.
B)  too few resources are devoted to health care.
C)  physicians have no control over prices.
D)  everyone has an excessive amount of insurance.E) A) and D)
F) A) and C)

Exam 4: Applications of Demand and Supply

Which of the following statements concerning insurance for health-care services is true?

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A price that the government guarantees farmers will receive for a particular crop is a(n) :

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An area of concern in the provision of health care in the United States is that:

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The relationship between the value and price of a stock suggests that:

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The equilibrium price in a market is established subject to the all other things unchanged condition and, therefore, very well may change due to:

Correct AnswerverifiedShow Answer

Which of the following would lead to an increase in the demand for health care?

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Price controls:

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In terms of equity, existing farm policies tend to help:

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In agriculture during the last several decades:

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In addition to setting prices, the government has attempted to help farmers by:

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Health-care spending as a percentage of total U.S.output generally rose between 1960 and 1995.

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In 1997, the health-care system in the United States accounted for about _______ percent of total output.

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Insurance companies have addressed the high costs of health care by:

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Which of the following is a demand factor in the health-care market?

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During the Great Depression:

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Those things held unchanged when an equilibrium price is established:

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An area of concern in the provision of health care in the United States is that:

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The market for health care is characterized by which of the following?

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A market price support policy attempts to assist the farm industry by:

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If the government sets out to help low-income people by establishing a maximum amount for rent:

Correct AnswerverifiedShow Answer

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