Test Bank Chapter 4 Applications Of Supply And Demand - Macroeconomics v3.0 Complete Test Bank by LibRittenberg. DOCX document preview.
Chapter 4: Applications of Supply and Demand
Multiple Choice
1. In the market for personal computers and in the stock market:
A) supply and demand shifts change prices and quantities.
B) persistent shortages and surpluses rarely exist.
C) in response to shifts in demand and supply, equilibrium is restored quickly.
D) all of the above are true.
Difficulty: Medium
2. In the 1960s the dominant maker of mainframe computers was:
A) IBM.
B) Apple Computer.
C) Compaq.
D) GM.
Difficulty: Easy
3. In the personal computer industry, the reason for the fall in prices and the increase in quantity after 1980 was:
A) mainly a function of resource prices.
B) primarily due to technological change and an increase in the number of sellers.
C) a result of a dramatic decrease in U.S. wages.
D) a result of a dramatic decrease in foreign wages.
Difficulty: Easy
4. An important reason for the rapid increase in output in the computer industry after 1980 was:
A) the invention of the microchip.
B) a reduction in the size and cost of computers.
C) a great increase in the number of computer producers.
D) all of the above.
Difficulty: Medium
5. A firm owned by one individual is called a:
A) corporation.
B) partnership.
C) sole proprietorship.
D) none of the above.
Difficulty: Easy
6. Most firms in the United States today are:
A) sole proprietorships and partnerships.
B) owned by government.
C) corporations.
D) owned by shareholders.
Difficulty: Easy
7. The bulk of the nation's output is produced by:
A) partnerships.
B) proprietorships.
C) corporations.
D) none of the above.
Difficulty: Easy
8. The demand curve for stocks shows that:
A) at lower prices, less stock will be purchased.
B) at lower prices, more people calculate that the expected value of the firm's future earnings justify the stock's purchase.
C) at lower prices, more stock will be offered on the market.
D) A and B are true.
Difficulty: Medium
9. The relationship between the value and price of a stock suggests that:
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.
Difficulty: Medium
10. Those things held unchanged when an equilibrium price is established:
A) are called demand and supply shifters if a change in one (or more) of them would change demand or supply.
B) include only supply shifters.
C) seldom change, and therefore prices and quantity in most markets are remarkably stable.
D) never change, by definition.
Difficulty: Medium
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:
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.
Difficulty: Medium
12. In the stock market:
A) changes in expectations will affect suppliers but not demanders.
B) expectations that cause the demand curve to shift in one direction are usually associated with a supply shift in the same direction.
C) the demand for stocks in recent years can be affected by demographic and income changes.
D) all of the above are true.
Difficulty: Medium
13. The equilibrium price established by demand and supply could be called a "just right" price because:
A) any price above it would be "too high" and cause a shortage.
B) any price below it would be "too low" and cause a surplus.
C) it is the only price where the quantity demanded and the quantity supplied are equal.
D) of all of the above.
Difficulty: Medium
14. The equilibrium price is often considered to be "just right" because:
A) it equates the amount supplied with the amount demanded.
B) it does not result in a shortage.
C) it does not result in a surplus.
D) of all of the above.
Difficulty: Medium
15. As discussed in the Case in Point on Arab spring and oil markets, the regime changes in Tunisia, Egypt, and Libya through 2011 resulted in:
A) an increase in the demand for oil and an increase in price.
B) a decrease in the demand for oil and a decrease in price.
C) an increase in the supply of oil and a decrease in price.
D) a decrease in the supply of oil and an increase in price.
Difficulty: Medium
16. As discussed in the Case in Point on Arab spring and oil markets, after the official start of the recession in the U.S. in 2007, oil prices:
A) began to fall because of decreased demand in China and India.
B) began to fall because of decreased demand in the U.S. and Europe.
C) began to rise because of increased demand in China and India.
D) began to rise because of increased demand in the U.S. and Europe.
Difficulty: Medium
17. Price controls:
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.
Difficulty: Hard
18. Those who make economic policy concerning price controls often do so in order to:
A) establish a more equitable result based on normative judgments.
B) raise revenues to support the activities of government.
C) change the facts on which economic theory is built.
D) do all of the above.
Difficulty: Hard
19. A minimum price set above the equilibrium price is a:
A) demand price.
B) supply price.
C) price floor.
D) price ceiling.
Difficulty: Easy
20. During the Great Depression:
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.
Difficulty: Easy
21. During the 1930s, the role of the federal government in the U.S. agricultural industry:
A) remained unchanged from the earlier decades.
B) decreased substantially.
C) decreased marginally.
D) increased substantially.
Difficulty: Medium
22. A market price support policy attempts to assist the farm industry by:
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.
Difficulty: Medium
23. A market price support policy establishes price ________ the market equilibrium.
A) floors below
B) floors above
C) ceilings below
D) ceilings above
Difficulty: Medium
24. A market price floor for wheat:
A) increases the price paid by consumers.
B) decreases the price paid by consumers.
C) decreases the price received by farmers.
D) does not change the price received by farmers.
Difficulty: Medium
25. A price that the government guarantees farmers will receive for a particular crop is a(n):
A) price ceiling.
B) price support.
C) deficiency price.
D) export price.
Difficulty: Easy
26. Between 1930 and 1933, the prices received by farmers tended to:
A) fluctuate up and down about equally.
B) decrease.
C) remain constant.
D) increase.
Difficulty: Easy
27. Farm products are normal goods, which means that as:
A) incomes go up, the demand curve shifts to the right.
B) incomes go up, the supply curve shifts to the right.
C) price falls, the quantity demanded decreases.
D) as incomes increase, people buy less.
Difficulty: Medium
28. Farm legislation has historically tried to increase farm income by:
A) guaranteeing a minimum price to farmers.
B) imposing limits on production.
C) insulating farmers from fluctuations in prices.
D) doing all of the above.
Difficulty: Medium
Use the following to answer questions 29-31.
Exhibit: Supply and Demand in Agriculture
29. (Exhibit: Supply and Demand in Agriculture) To help farmers:
A) a price floor would be set at P4, causing a surplus of Q3 - Q0.
B) a price floor would be set at P2, causing a surplus of Q2 - Q0.
C) a price ceiling would be set at P4, causing a surplus of Q2 - Q1.
D) a price floor would be set at P1, causing a shortage of Q3 - Q0.
Difficulty: Hard
30. (Exhibit: Supply and Demand in Agriculture) If a price floor at P4 is set to help farmers in terms of income and government wants to assure farmers that their output will be purchased, the government would have to purchase an amount of output equal to:
A) Q3 - Q0.
B) Q3 - Q1.
C) Q2 - Q1.
D) none of the above are correct.
Difficulty: Hard
31. (Exhibit: Supply and Demand in Agriculture) If the government set an effective price floor at one of the prices shown on the vertical axis:
A) Q3 bushels of wheat would be supplied.
B) with this much wheat on the market, the price would fall to P1.
C) the resulting shortage would be made up by the government out of its accumulated stocks.
D) all of the above would be true.
Difficulty: Hard
32. In addition to setting prices, the government has attempted to help farmers by:
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.
Difficulty: Medium
33. In terms of equity, existing farm policies tend to help:
A) all farmers equally.
B) none of the farmers.
C) poor farmers more than wealthy farmers.
D) wealthy farmers more than poor farmers.
Difficulty: Medium
34. A market price support policy for crops establishes a price floor, which:
A) decreases the price paid by consumers.
B) does not change the price paid by consumers.
C) increases the price received by farmers.
D) decreases the price received by farmers.
Difficulty: Medium
35. A cost that farm subsidies and price floors imposes on the rest of the economy is:
A) excessively mobile farm resources.
B) higher consumer commodity prices.
C) less government-funded agricultural research.
D) efficient farmers that leave the farming industry.
Difficulty: Medium
36. The downside to helping farmers through price supports and output restrictions has been that:
A) consumers pay higher prices for food.
B) citizens pay higher taxes to support the costs of the program.
C) most federal subsidies have historically helped the rich farmers, not the poor.
D) all of the above.
Difficulty: Medium
37. A maximum price set below the equilibrium price is a:
A) demand price.
B) supply price.
C) price floor.
D) price ceiling.
Difficulty: Easy
38. Economists in general agree that rent controls are:
A) an efficient and equitable way to help low-income families.
B) an inefficient and ineffective way to help low-income families.
C) an efficient method of dealing with the supply of rental units but don't provide relief for low-income families.
D) not very efficient but still a good way to solve the problem of low income.
Difficulty: Medium
Use the following to answer questions 39-41.
Exhibit: Rent Controls
39. (Exhibit: Rent Controls) Without rent controls, the equilibrium rent is _______ and the equilibrium quantity is _______ .
A) Rent2; Q1
B) Rent1; Q1
C) Rent2; Q2
D) Rent3; Q3
Difficulty: Easy
40. (Exhibit: Rent Controls) If rent controls are imposed, they will most likely be set at either _______ or _______ .
A) Rent0; Rent1
B) Rent1; Rent3
C) Rent3; Rent4
D) All of the above are equally likely rent control levels.
Difficulty: Medium
41. (Exhibit: Rent Controls) If rent controls are set at Rent0:
A) the shortage of rental units is Q2 to Q0.
B) some renters would be willing to pay a price as high as Rent4 for Q0 units.
C) no one would have to pay a higher actual price than Rent0 nor would anyone be willing to do so.
D) there would be a shortage of rental units, but it is impossible to tell how large the shortage is based on the information provided.
Difficulty: Hard
42. Which of the following statements are true about price controls used by some local governments?
A) Price controls are imposed to increase market efficiency.
B) Price controls seem to be a very effective way to reduce inequities.
C) Price controls are put into place when it is thought that the market price is in some way unfair or inequitable.
D) All of the above statements are true.
Difficulty: Hard
43. A maximum legal price is called:
A) a price support.
B) a price floor.
C) a price ceiling.
D) the parity price.
Difficulty: Hard
44. A persistent shortage may occur if:
A) the government imposes a price ceiling.
B) a price floor is imposed.
C) demand keeps falling.
D) all of the above occur.
Difficulty: Medium
45. If the government sets out to help low-income people by establishing a maximum amount for rent:
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.
Difficulty: Medium
46. Rent controls:
A) almost always help low-income families find low-cost housing.
B) often help high-income families.
C) cause the quantity supplied to exceed the quantity demanded.
D) result in all of the above.
Difficulty: Hard
47. A ceiling price set in the policy of rent controls:
A) will be set at a price above the equilibrium price.
B) may result in some people who rent out units to leave the business because they cannot cover costs.
C) will lead to rental units being higher in quality because landlords are guaranteed a high price.
D) will create a surplus of housing.
Difficulty: Hard
48. Rent controls set a price ceiling below the equilibrium price and therefore:
A) quantity supplied exceeds the quantity demanded.
B) quantity demanded exceeds the quantity supplied.
C) a surplus of rental units will result.
D) poor people will obviously and clearly be helped.
Difficulty: Medium
49. A price ceiling will have no effect if:
A) it is set above the equilibrium price.
B) the equilibrium price is above the price ceiling.
C) set below the equilibrium price.
D) it creates a shortage.
Difficulty: Medium
50. Price ceilings which lead to shortages will impose costs on society because they:
A) will lead to waiting lines.
B) may result in black market prices, which are higher than the market-determined price would be.
C) lead to a smaller quantity offered on the market.
D) do all of the above.
Difficulty: Hard
51. According to the Case in Point on corn, the Energy Policy Act of 2005 called for _____ production of ethanol using _____.
A) increased; loan guarantees, support for research, and tax credits
B) increased; price ceilings
C) decreased; loan guarantees, support for research, and tax credits
D) decreased; price floors
Difficulty: Medium
52. According to the Case in Point on corn, which of the following is a criticism that has been raised of government spending in support of corn-based ethanol?
A) limited reduction in dependence on foreign oil.
B) detrimental effects on the environment.
C) increased food prices and an increase in world hunger.
D) All of the above.
Difficulty: Hard
53. According to the textbook, much of the discussion about the health-care "problem" in the United States has focused on:
A) the inability of doctors to provide adequate health-care services.
B) rising spending for health care.
C) the shortage of adequate space in hospitals.
D) the surplus of nurses.
Difficulty: Easy
54. An area of concern in the provision of health care in the United States is that:
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.
Difficulty: Medium
55. An area of concern in the provision of health care in the United States is that:
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.
Difficulty: Medium
56. In 1960, the percentage of total output the United States devoted to health care was about ________ percent.
A) 2
B) 5
C) 10
D) 13
Difficulty: Easy
57. In 2015, the percentage of total output the United States devoted to health care was about ________ percent.
A) 2
B) 6
C) 10
D) 18
Difficulty: Easy
58. An arrangement in which consumers choose their health-care services while other institutions pay a share of the cost of those services is called a(n) ________ payer system.
A) provider fees
B) insurance premiums
C) third-party
D) catastrophic insurance
Difficulty: Easy
59. Which of the following statements concerning insurance for health-care services is true?
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.
Difficulty: Medium
60. A feature of the health-care market is:
A) that demand has fallen relative to supply.
B) that supply has increased relative to demand.
C) that demand has increased relative to supply.
D) all of the above.
Difficulty: Medium
61. The Affordable Health Care Act of 2010:
A) requires that individuals purchase health insurance.
B) requires that insurance companies provide coverage for children on their parent’s policies up to the age of 26.
C) bars insurance companies from denying coverage based on pre-existing conditions.
D) all of the above
Difficulty: Medium
62. In the last 30 years, the costs of health care have _______ as a percentage of U.S. output.
A) gone up in absolute terms, but decreased
B) gone down absolutely, but increased
C) gone down absolutely and
D) increased absolutely and
Difficulty: Medium
63. Which of the following statements is (are) true?
A) In the last few decades health-care spending has grown dramatically.
B) Health-care costs have grown relative to an increasing total output.
C) Health-care costs account for more than two and a half times the share of total output that they did in 1960.
D) All of the above are true.
Difficulty: Medium
Use the following to answer questions 65-71.
Exhibit: The Market for Health Care
64. (Exhibit: The Market for Health Care) Based on the exhibit and assuming that there are no third-party payers, the:
A) equilibrium price for health-care services is P2.
B) equilibrium quantity is Q2.
C) total amount spent on health-care services at the equilibrium price is OP3BQ2.
D) equilibrium price for health-care services is P1.
Difficulty: Hard
65. (Exhibit: The Market for Health Care) Based on the exhibit and assuming that there are no third-party payers:
A) the equilibrium quantity is Q2.
B) the equilibrium quantity is Q1.
C) the total amount spent on health-care services at the equilibrium price is given by the area OP3BQ2.
D) none of the above are true.
Difficulty: Hard
66. (Exhibit: The Market for Health Care) Based on the exhibit and assuming that there are no third-party payers:
A) the total amount spent on health services is OP1AQ1 at price P1.
B) the equilibrium price and quantity are P3 and Q2.
C) at price P2 there would be a surplus.
D) A and B are true.
Difficulty: Hard
67. (Exhibit: The Market for Health Care) Suppose insurance lowers the price consumers pay to P2. Compared to the situation without insurance, this would:
A) reduce the equilibrium price to P2.
B) reduce the quantity demanded to Q1.
C) increase the quantity demanded to Q2.
D) have no effect on quantity demanded.
Difficulty: Hard
68. (Exhibit: The Market for Health Care) The quantity Q2 is available at price:
A) P1.
B) P2.
C) P3.
D) none of the above are correct.
Difficulty: Hard
69. (Exhibit: The Market for Health Care) When the price of P2 becomes available to the consumer because of insurance:
A) health-care costs are now OP3BQ2, of which OP3CQ2 is paid by consumers and P2P3BQ2 is paid by insurance.
B) health-care costs are now OP3BQ2, of which P2P3BQ2 is paid by consumers and OP2CQ2 is paid by insurance.
C) the new quantity of health care is Q2.
D) the new quantity of health care is Q1.
Difficulty: Hard
70. (Exhibit: The Market for Health Care) At price P3 the total cost of health-care services compared to price P1 has increased from:
A) OP3BQ2 to OP1AQ2.
B) OP1AQ1 to OP3BQ2.
C) OP3BQ2 to OP1AQ1, and consumers pay OP1AQ12.
D) OP1AQ1 to OP3BQ2, and insurance pays OP2CQ2.
Difficulty: Hard
Use the following to answer questions 72-78.
Exhibit: Third-Party Payers
71. (Exhibit: Third-Party Payers) Based on the exhibit, and assuming there are no third-party payers, the:
A) equilibrium price for physician office visits is $80.
B) equilibrium quantity is 3 million physician office visits per week.
C) total amount spent on physician office visits per week at the equilibrium price is $40 million.
D) equilibrium price for physician office visits is $40.
Difficulty: Hard
72. (Exhibit: Third-Party Payers) Based on the exhibit, and assuming there are no third-party payers:
A) the equilibrium quantity is 3 million physician office visits per week.
B) the equilibrium quantity is 2 million physician office visits per week.
C) the total amount spent on physician office visits at the equilibrium price is $180 million.
D) the equilibrium quantity is 1 million physician office visits per week.
Difficulty: Hard
73. (Exhibit: Third-Party Payers) Based on the exhibit, and assuming there are no third-party payers:
A) the total amount spent on health services is $80 million per week.
B) the equilibrium price and quantity are $60 and 3 million per week, respectively.
C) At a price of $20, there would be a surplus.
D) At a price of $60, there would be a shortage.
Difficulty: Hard
74. (Exhibit: Third-Party Payers) Suppose insurance lowers the price consumers pay to $20 per visit. Compared to the situation without insurance, this would:
A) reduce the equilibrium price to $20.
B) reduce the quantity demanded to 2 million visits per week.
C) increase the quantity demanded to 3 million visits per week.
D) do none of the above.
Difficulty: Hard
75. (Exhibit: Third-Party Payers) Three million physician office visits per week are available at a price of __________ per visit:
A) $60
B) $40
C) $20
D) none of the above prices are correct.
Difficulty: Hard
76. (Exhibit: Third-Party Payers) When the price of $20 per visit becomes available to the consumer because of insurance:
A) health-care costs become $180 million, of which $60 million is paid by consumers and $120 million is paid by insurance.
B) health-care costs become $180 million, of which $120 million is paid by consumers and $60 million is paid by insurance.
C) the new quantity of physician office visits is 1 million visits per week.
D) both A and C are true.
Difficulty: Hard
77. (Exhibit: Third-party payers) At a price of $60 with a third party payer, the total cost of health-care services compared to the price that would prevail if there were no third-party payers has:
A) decreased from $180 million to $80 million.
B) increased from $80 million to $180 million.
C) decreased from $180 million to $80 million, and consumers pay $60 million
D) increased to $180 million, and insurance pays $60 million.
Difficulty: Hard
78. Health care is a(n):
A) abnormal good.
B) superior good.
C) normal good.
D) good where higher incomes lead to less spending.
Difficulty: Easy
79. Economists classify health care as:
A) an inferior good.
B) a normal good.
C) a good with many close substitutes.
D) a good whose quantity changes considerably with a change in price.
Difficulty: Medium
80. In markets with third-party payers,
A) prices consumers pay directly for the goods and services they consume decrease.
B) prices suppliers receive for the goods and services they provide increase.
C) total spending increases.
D) all of the above
Difficulty: Hard
81. Third-party payers for health-care services include payments made by:
A) doctors.
B) patients.
C) hospitals.
D) government.
Difficulty: Medium
82. Third-party payers for health-care services include payments made by:
A) doctors.
B) patients.
C) hospitals.
D) insurance companies.
Difficulty: Medium
83. Third-party payer systems are most likely to ________ the quantity of health care ________.
A) increase; demanded
B) decrease; demanded
C) not change; supplied
D) decrease; supplied
Difficulty: Medium
84. Eliminating third-party payer systems is most likely to ________ the quantity of health care ________.
A) increase; demanded
B) decrease; demanded
C) have no effect on; demanded
D) increase; supplied
Difficulty: Medium
85. One source of high health-care costs is the:
A) relatively small fraction of health-care expenditures paid directly by patients.
B) relatively small fraction of health-care expenditures paid by third-party payers.
C) deficiency in the availability of diagnostic tests.
D) excessive competition in the market for health care.
Difficulty: Medium
86. One source of high health care costs is the:
A) relatively large fraction of health care expenditures paid directly by patients.
B) relatively large fraction of health care expenditures paid by third-party payers.
C) deficiency in the availability of hospital beds.
D) deficiency in the availability of diagnostic tests.
Difficulty: Medium
87. In the market for health care:
A) there has been no effect of the presence of third-party payers.
B) the effect of third-party payers decreases the price that consumers pay.
C) providers are encouraged to supply a greater quantity than they would without third-party payers.
D) B and C are true.
Difficulty: Easy
88. The individual mandate provision of the Affordable Care Act of 2010 requires:
A) nurses to provide medical services for individuals with pre-existing conditions.
B) doctors to provide medical services for individuals with pre-existing conditions.
C) hospitals to provide medical care to individuals who are not covered under group insurance plans from their employers.
D) individuals to purchase health insurance.
Difficulty: Medium
89. According to the textbook, which of the following are suggestions to limit health-care spending?
A) requiring patients to pay a larger share
B) government regulation
C) the use of insurance companies that limit spending
D) all of the above
Difficulty: Hard
90. The United States is confronted with two significant problems in health care. They are:
A) health-care cost and how to limit spending on health care.
B) increasing the demand for health care and decreasing the supply of health care.
C) the need to build more hospitals and the slow rate of technological change in health care.
D) all of the above.
Difficulty: Medium
91. Which of the following would lead to an increase in the demand for health care?
A) Physicians' productivity increases.
B) Medicare subsidies are lowered.
C) The average population age increases.
D) Subsidies for Medicare are reduced.
Difficulty: Easy
92. Which of the following would lead to an increase in the supply of health care?
A) An increase in the number of people insured.
B) Increased tax subsidies for health care.
C) An increase in the productivity of doctors.
D) All of the above would increase the supply of health care.
Difficulty: Medium
93. Of the following, which would result in increasing demand in the health-care industry?
A) an increase in the spread of contagious diseases
B) an older population
C) increasing incomes
D) All of the above are demand factors that would result in higher demand.
Difficulty: Medium
True/False
1. Health-care spending as a percentage of total U.S. output generally rose between 1960 and 2015.
2. All health insurance plans charge the same and require subscribers to pay the same percentage of the costs of health care they consume.
3. Technological improvements in the health care industry have contributed to the increase in health care costs.
4. Over the last few decades government has decreased its participation in health care.
5. Third-party payments have led to an increase in the price and quantity of health care in the United States.
6. As the fraction of health-care costs paid by consumers falls, their quantity of health-care services consumed increases.
7. Although health-care costs have increased recently in absolute terms, they have fallen as a percentage of total output.
8. The Oregon Plan in the 1990s for the provision of health care to people living below the poverty line generally increased the number and type of procedures for which they were eligible.
9. The idea behind limiting the number and type of procedures the Oregon Plan of the 1990s covered was to be able to increase the number of people included in its coverage.
10. Health care is an inferior good.
11. Health care is a normal good.
Short Answer
1. Using a simple demand and supply model, discuss how insurance affects the health-care market.
2. Discuss in some detail basic alternatives that have been proposed to curtail the rise in health-care costs.
3. What are the basic provisions of the Affordable Health Care Act of 2010?
4. Despite the “Great Recession” that began in 2007, oil prices rose in that same year. Why would we expect oil prices to fall and in this case why did they increase?
5. Discuss the arguments in favor of and against the U.S. government’s financial support of corn-based ethanol.
6. How does the supply of health care in general and doctors in particular contribute to the rising costs of health care?
7. Explain the reasons for the significant escalation in health-care costs over the last several decades.
8. Describe in general the health-care industry. In your discussion, explain the peculiarities of health care, demand and supply factors, and the major problems of the industry.
9. Increased spending on consumer goods such as refrigerators, TV sets, and other items of furniture is considered desirable. Why, then, is there so much concern, even frustration, about the dramatic increase in health-care expenditures?