Full Test Bank Ch22 Contemporary Issues In The U.S. Economy

Indicate whether the statement is true or false.

1. When positive network effects are present, platform markets exhibit a particular kind of economy of scale.

2. Adverse selection in health insurance occurs when those who are less likely to need health care, such as younger and healthier workers, choose not to purchase it.

3. A deductible is a fixed amount that the insured person must pay before their insurance kicks in.

4. A trade war is said to occur when each country takes steps to make it harder for other countries to sell into its markets.

5. Co-pay is a fixed amount that the insured person must pay each time he or she uses health care.

6. Non-tariff barriers are tools that countries use to restrict trade such as regulatory or legal barriers or slow processing of goods at borders.

7. The United States tends to rely more on private health insurance than other countries do.

8. The United States spends much more on health care per capita than other nations do but does not get better health outcomes.

9. The default rate actually drops as the amount borrowed increases, that is, default rates are highest among those with the smallest student loan debts.

10. In the health insurance context, moral hazard occurs when patients make less healthy choices and doctors provide treatments that have little medical benefit because they know the costs will be covered by insurance.

11. Artificial intelligence (AI) refers to creating and using intelligent machines that work and react like humans.

12. Network effects occur when the value of a platform to its users changes as the number of users rises.

13. Contingent workers are those who have no regular employment arrangement (such as a 40-hour week), but rather work as and where there is work to be done.

14. Facebook and Google were responsible for over 60 percent of digital advertising expenditures in 2017.

15. Both Google and Facebook make their money by charging advertisers to run their ads, and the bigger an audience they have, the more they can charge.

16. Social Security is an important example of a portable benefit that follows the worker, no matter who their employer is.

17. Platform companies may charge low prices on one side not to drive rivals out of business but to expand the market on the other side.

Indicate the answer choice that best completes the statement or answers the question.

18. A pricing strategy below cost is often claimed to be ________, done to drive rivals out of business so that the firm can subsequently raise its price back up to the monopoly level.

19. If you have a $50 co-pay, you must pay ____ for each doctor’s visit.

20. If you have a policy with 20 percent co-insurance, your insurer will pay ___ percent of your bill, leaving ___ percent for you.

21. ______________ refers to the fraction of your medical bill that you, rather than your insurer, must cover.

22. ______ has taken on some negative political connotations because more international trade and more immigration inevitably creates some losers as well as many winners.

23. If you have, say, a $2,000 deductible, your insurance will only start paying after you have spent ____ of your own money on health care.