1. A central issue that society must deal with regarding health care: a. Concern
ID: 1212355 • Letter: 1
Question
1. A central issue that society must deal with regarding health care:
a. Concerns that optimal mix of expenditures for the various categories of health care (prescription drugs, nursing home care, and medical products).
b. Is whether the government should be involved in the healthcare market.
c. Is whether people should be required to seek preventative care.
d. Is whether health care insurance companies should be involved in the healthcare market.
e. Is whether medical care in the emergency room should be delivered only to those who can pay for it.
2. Assume that Aaron and Jane are two experimental subjects who practice bounded rationality. If Aaron were to offer an unfair proposal, he would likely receive a payoff of _____, but if he were to offer a fair proposal, he would likely receive a payoff of _____.
a. $0; $500
b. $0; $0
c. $500; $0
d. $0; $999
e. $999; $0
3. A doctor may order more tests than necessary for a patient. This reflects which of the following problems?
a. Market Failure
b. Adverse Selection
c. Symmetric Information
d. Diminishing Returns
e. Principle-agent problem
4. Factors of production are:
a. The property of firms
b. Goods and services
c. Purchased by the consumer for personal use
d. Sold by the consumer for income
e. Used to make goods and services
5. Derived demand best describes the demand for which of the following options?
a. Cars
b. Hair stylists
c. Cat food
d. Water Bottles
e. Cupcakes
6. A situation with only one buyer of labor is called a(n):
a. Monopoly
b. Labor market disequilibrium
c. Oligopoly
d. Labor market equilibrium
e. Monopsony
Explanation / Answer
1. A central issue that society must deal with regarding health care:
e. Is whether medical care in the emergency room should be delivered only to those who can pay for it.
2. Assume that Aaron and Jane are two experimental subjects who practice bounded rationality. If Aaron were to offer an unfair proposal, he would likely receive a payoff of _____, but if he were to offer a fair proposal, he would likely receive a payoff of _____.
a. $0; $500..... assuming a total payoff of $ 1000
3. A doctor may order more tests than necessary for a patient. This reflects which of the following problems?
e. Principle-agent problem....one person(agent) is able to make decisions on behalf of or that impact other person (principal)
4. Factors of production are:
e. Used to make goods and services....Factors of production are land, labor, capital etc
5. Derived demand best describes the demand for which of the following options?
c. Cat food.....derived demand is a result of demand for something else, cats in this case
6. A situation with only one buyer of labor is called a(n):
e. Monopsony
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