Question 1

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) A) and B)
F) B) and C)

Question 2

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) None of the above
F) B) and C)

Question 3

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) B) and C)
F) A) and C)

Question 4

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) B) and C)
F) A) and C)

Question 5

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) B) and D)
F) C) and D)

Question 6

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) A) and D)

Question 7

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 8

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

Accepted Answer

A) True 
 B)False

Question 9

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) All of the above
F) A) and B)

Question 10

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) B) and C)

Question 11

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) A) and D)
F) A) and C)

Question 12

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) C) and D)
F) A) and D)

Question 13

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 C)

Question 14

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) A) and B)
F) B) and D)

Question 15

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) A) and C)
F) A) and D)

Question 16

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) B) and D)
F) B) and C)

Question 17

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) None of the above
F) A) and D)

Question 18

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 D)

Question 19

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) C) and D)
F) None of the above

Question 20

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 B)
F) None of the above

Exam 4: Applications of Demand and Supply

Price controls:

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

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Those things held unchanged when an equilibrium price is established:

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

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

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

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

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In agriculture during the last several decades:

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

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

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During the Great Depression:

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

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

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

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

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A market price support policy attempts to assist the farm industry 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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Which of the following is a demand factor in the health-care market?

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