question 1 (5 points)

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A situation in which having insurance causes people to take greater risks is called:

Question 1 options:

a) 

Adverse Selection

b) 

Moral Hazard

c) 

A mixed market

d) 

Asymmetric Information Question 2 (5 points)

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Public goods are:

Question 2 options:

a) 

Rival and excludable

b) 

Rival and nonexcludable

c) 

Nonrival and nonexcludable

d) 

Nonrival and excludable Question 3 (5 points)

Which of the following statements is FALSE concerning comparative effectiveness research?

Question 3 options:

a) 

The objective is to improve health outcomes by developing and disseminating evidence-based information to patients and providers.

b) 

Using clinical trials is the least costly and less time-consuming method for conducting comparative effectiveness research

c) 

The Patient Centered Outcome Research Institute (PCORI) was created under the Affordable Care Act (PPACA) to conduct comparative effectiveness research

d) 

Using comparative effectiveness research to reduce costs and make coverage decisions can be controversial.  Question 4 (5 points)

Which of the following is a correct statement?

Question 4 options:

a) 

Both purely competitive and monopolistic firms are “price takers.”

b) 

Both purely competitive firms and monopolistic firms are “price makers”

c) 

A purely competitive firm is a “price-taker” and a monopolistic firm is a “price-maker”

d) 

A purely competitive firm is a “price-maker” and a monopolistic firm is a “price-taker” Question 5 (5 points)

The demand curve confronted by the individual purely competitive firm is:

Question 5 options:

a) 

Relatively Elastic

b) 

Perfectly elastic

c) 

Relatively inelastic

d) 

Perfectly inelastic Question 6 (5 points)

Pure monopolists may obtain economic profit in the long-run because:

Question 6 options:

a) 

Of advertising

b) 

Marginal revenue is constant as sales increase

c) 

Of barriers to entry

d) 

Of rising average fixed costs Question 7 (5 points)

An industry is characterized as having many firms, a differentiated product, no barriers to entry and elastic demand. What is it’s market structure?

Question 7 options:

Perfectly competitive

Oligopoly

Monopolistic Competition

Monopoly Question 8 (5 points)

The individual mandate under the Affordable Care Act was intended to prevent which of the following?

Question 8 options:

a) 

Rising health care costs

b) 

Rising deficits

c) 

Adverse selection

d) 

Moral hazard Question 9 (5 points)

Which of the following conditions is NOT NECESSARY in order for a firm to price discriminate?

Question 9 options:

a) 

The product cannot be resold

b) 

The firm must have some market power

c) 

The firm must have many buyers and sellers

d) 

The market can be segmented into different groups of consumers Question 10 (5 points)

Which of the following statements correctly identifies increasing returns in production?

Question 10 options:

a) 

As a firm adds workers, output declines

b) 

Marginal Product is greater than  Average Product

c) 

Marginal Product equals Average Product

d) 

As firms increase workers, output increases at a diminishing rate Question 11 (5 points)

Which of the following correctly identifies the price at which a firm should shut-down?

Question 11 options:

a) 

Price is greater than the average variable cost

b) 

Price is equal to the marginal cost

c) 

Price is less than the total cost

d) 

Price is less than the average variable cost Question 12 (5 points)

Which of the following market structures experiences a “Nash Equilibrium” in terms of pricing behavior?

Question 12 options:

a) 

Perfect competition

b) 

Oligopoly

c) 

Monopoly

d) 

Monopolistic Competition Question 13 (5 points)

Which of the following is NOT considered a criteria of an “efficient market”?

Question 13 options:

a) 

Perfect information

b) 

Positive externalities exist

c) 

Lots of buyers and sellers

d) 

No barriers to entry and market is perfectly competitive Question 14 (5 points)

Which of the following is NOT a factor that leads to a shift in the supply curve?

Question 14 options:

a) 

Change in labor and capital inputs

b) 

Change in consumer income

c) 

Change in number of firms in industry

d) 

Government regulations Question 15 (5 points)

For which of the following goods is the demand curve likely to be the most inelastic?

Question 15 options:

a) 

Taxicab transportation for a family vacationing in DC

b) 

Insulin for a diabetic

c) 

An Apple Smartphone

d) 

Elective cosmetic surgery  Question 16 (5 points)

Which of the following is the best example of a public good?

Question 16 options:

a) 

National Defense

b) 

A local gas station

c) 

A city-owned electric power generating plan

d) 

Public Universities Question 17 (5 points)

A perfectly competitive firm has the following option with respect to how it sets price: 

Question 17 options:

a) 

Are required to accept below-market prices if they wish to sell their product

b) 

Often set the price of their product above the market equilibrium to take advantage of market imperfections

c) 

Have a great deal of latitude when it comes to setting the price of their product

d) 

Have little choice but to accept the prevailing market price for their product Question 18 (5 points)

What market failure does the regulation of nursing home quality address?

Question 18 options:

High long-term care costs

Existence of a public good

Asymmetric Information

All of the above Question 19 (5 points)

Which if the following is NOT a likely result of limits on physician reimbursement rates under Medicare? 

Question 19 options:

Reduction in quality of care provided

Access problems for Medicare beneficiaries

Increase in supply of physicians

Shortage of physicians Question 20 (5 points)

Economics is the Study of _________________________

Question 20 options:

a) 

The interaction of people in social situations

b) 

The scarcity of resources or goods

c) 

Human behavior under stressful situations

d) 

Biological systems in the environment