Question 1 When abdominoplasty costs were $6,000, Dr. Hurwitz treated 300 patien
ID: 1190444 • Letter: Q
Question
Question 1
When abdominoplasty costs were $6,000, Dr. Hurwitz treated 300 patients. When they dropped the price to $5,000, customers increased to 500.
What is the elasticity of demand for abdominoplasty using arc elasticity or the midpoints formula (rounded-off to 2 decimal places)?
a.
- 0.02
b.
- 0.36
c.
- 1.57
d.
- 2.75
e.
none of the above
2 points
Question 2
In terms of raising revenue did the doctor make the right decision (in question 1)
a.
yes
b.
no
c.
revenue did not change
d.
not enough info available
e.
none of the above
2 points
Question 3
Dr. JD, an oncologist, read a study that concluded that whites are more prone to melanoma than blacks. Despite reading this, Dr. JD ignores the finding and continues to pay more attention to blacks, spending more hours with them for possible melanoma findings. He has no basis for doing it this way he just likes to do it this way. This doctor is engaged in:
a.
taste discrimination
b.
efficient statistical discrimination
c.
inefficient statistical discrimination
d.
all of the above
e.
none of the above
2 points
Question 4
An increase in years of education causes
a.
a movement up along the MEC curve
b.
the MEC curve shifts to the right
c.
a shift up of the marginal cost curve
d.
none of the above
2 points
Question 5
Given a point (point E) on the R-S graph, if r increases and q decreases (and magnitude of r change is LESS than the magnitude of the q change) then the new point will be ___________ of point E
a.
below left
b.
below right
c.
above left
d.
above right
e.
none of the above
2 points
Question 6
1. Joe tells his high school friends that right after he graduates he will definitely go to medical school, do internship, then do more schooling as he specializes in radiology. Joe most likely has __________ discount factor and ___________ discount rate.
a.
high; high
b.
high; low
c.
low; high
d.
low; low
2 points
Question 7
Given a point (point E) on the R-S graph, if r decreases and q increases (and magnitude of r change is LESS than the magnitude of the q change) then the new point will be ___________ of point E
a.
below left
b.
below right
c.
above left
d.
above right
e.
none of the above
2 points
Question 8
Given a point (point E) on the R-S graph, if r increases and q increases (and magnitude of r change is LESS than the magnitude of the q change) then the new point will be ___________ of point E.
a.
below left
b.
below right
c.
above left
d.
above right
e.
parallel to the right
2 points
Question 9
Full and fair insurance implies
a.
I'H = E(I)
b.
I'S = E(I)
c.
IH = E(I)
d.
IS = E(I)
e.
a and b
2 points
Question 10
1. Given
p = 11%
q = $81
r = $52
calculate the expected profits of the insurance company.
a.
$43.09
b.
$50.47
c.
$9.91
d.
$90.91
e.
none of the above
a.
- 0.02
b.
- 0.36
c.
- 1.57
d.
- 2.75
e.
none of the above
Explanation / Answer
1. e. Because (B2-B1) / (A2-A1) * (A2+A1) / (B2+B1), Where B2 is the intial number of patients and B1 is the number after change. A2 is the initial price and A2 is the price after change. So, (500-300) / (5000-6000) * (5000+6000) / (500+300) = (200 / - 1000) * (11000/800) = 11000*(-1000) / 800*200= - .6875
2. a. Yes the doctor made the right decission because when his fees was $6000 he treated 300 patients and generated a revenue of $1800000. Now when he decreased his fess to $5000 he is treating 500 patients that means he genarated a revenue of $2500000 which is much higher.
3. a.
4. More education or causes output to increase, so the production possibilities curve shifts outward so the answer of this question is d.
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