Question 1

Input demand is called derived demand because

Accepted Answer

A)  demand for an input is derived from demand for the product or service it produces. 
B)  demand for an input is derived from its availability in the input market. 
C)  demand for the output produced is also derived from consumer demand. 
D)  input demand actually determines how much output is produced. 
A)  demand for an input is derived from demand for the product or service it produces. 
B)  demand for an input is derived from its availability in the input market. 
C)  demand for the output produced is also derived from consumer demand. 
D)  input demand actually determines how much output is produced. A

Question 2

Suppose the market for nursing services in a local community is so dominated by a singly community hospital that for all practical purposes it is considered a monopsony. Using the diagram below, answer questions 1-2.
  
-What is the equilibrium wage and level of employment under monopsony?

Accepted Answer

A)  W1 and E1. 
B)  W2 and E0. 
C)  W0 and E0. 
D)  W0 and E1. 
E)  W0 and E2. 
A)  W1 and E1. 
B)  W2 and E0. 
C)  W0 and E0. 
D)  W0 and E1. 
E)  W0 and E2. C

Question 3

Which of the following statements about the distribution of physicians among specialties is true in the United States?

Accepted Answer

A)  The majority of physicians specialize in general/family practice. 
B)  There are twice as many generalists as there are specialists. 
C)  There are twice as many specialists as there are generalists. 
D)  The specialty distribution in the U.S. is similar to that of the rest of the world. 
E)  None of the above. 
A)  The majority of physicians specialize in general/family practice. 
B)  There are twice as many generalists as there are specialists. 
C)  There are twice as many specialists as there are generalists. 
D)  The specialty distribution in the U.S. is similar to that of the rest of the world. 
E)  None of the above. C

Question 4

Physicians salaries increased substantially over the decade 1995-2005 from an average of $215,000 to $315,000. What is the best explanation for this?

Accepted Answer

A)  Physicians were smarter in 2005 than in 1995. 
B)  The supply of physicians has increased. 
C)  The supply of physicians has decreased. 
D)  The demand for physicians has increased. 
E)  The demand for physicians has decreased. 
A)  Physicians were smarter in 2005 than in 1995. 
B)  The supply of physicians has increased. 
C)  The supply of physicians has decreased. 
D)  The demand for physicians has increased. 
E)  The demand for physicians has decreased.

Question 5

Which of the following would increase the supply of physicians?

Accepted Answer

A)  Increasing the cost of attending medical school. 
B)  More scholarships and grants to cover medical school tuition. 
C)  Increasing the medical school entrance requirements to include 15 hours of economics. 
D)  Making it easier for plaintiffs to prove medical malpractice claims. 
E)  Paying medical schools to eliminate residency opportunities in some specialties. 
A)  Increasing the cost of attending medical school. 
B)  More scholarships and grants to cover medical school tuition. 
C)  Increasing the medical school entrance requirements to include 15 hours of economics. 
D)  Making it easier for plaintiffs to prove medical malpractice claims. 
E)  Paying medical schools to eliminate residency opportunities in some specialties.

Question 6

In 2010, the medical specialty that earned the highest rate of return on investment was

Accepted Answer

A)  general primary care. 
B)  Internal medicine. 
C)  pediatrics 
D)  orthopedic surgery 
E)  none of these 
A)  general primary care. 
B)  Internal medicine. 
C)  pediatrics 
D)  orthopedic surgery 
E)  none of these

Question 7

Suppose the number of medical school graduates continues to increase over the next decade. Which of the following is true?

Accepted Answer

A)  Physicians' salaries must fall. 
B)  Physicians' salaries must rise. 
C)  Physicians' salaries will fall only if the demand for medical services falls. 
D)  Physicians' salaries will fall if the demand for medical services rises more than the supply of physicians rises. 
E)  Physicians' salaries will rise if the demand for medical services rises more than the supply of physicians rises. 
A)  Physicians' salaries must fall. 
B)  Physicians' salaries must rise. 
C)  Physicians' salaries will fall only if the demand for medical services falls. 
D)  Physicians' salaries will fall if the demand for medical services rises more than the supply of physicians rises. 
E)  Physicians' salaries will rise if the demand for medical services rises more than the supply of physicians rises.

Question 8

To address the shortage of physicians on the horizon, it will be necessary to

Accepted Answer

A)  build more medical schools. 
B)  provide more grants and scholarships for medical education. 
C)  allow the admission of more foreign-educated physicians. 
D)  all of these are true. 
A)  build more medical schools. 
B)  provide more grants and scholarships for medical education. 
C)  allow the admission of more foreign-educated physicians. 
D)  all of these are true.

Question 9

Suppose the market for nursing services in a local community is so dominated by a singly community hospital that for all practical purposes it is considered a monopsony. Using the diagram below, answer questions 1-2.
  
-If the market were perfectly competitive instead of dominated by a monopsonist, what would the equilibrium wage and level of employment be?

Accepted Answer

A)  W1 and E1. 
B)  W2 and E0. 
C)  W0 and E0. 
D)  W0 and E1. 
E)  W0 and E2. 
A)  W1 and E1. 
B)  W2 and E0. 
C)  W0 and E0. 
D)  W0 and E1. 
E)  W0 and E2.

Question 10

Surgical specialists earn more than general/family practice physicians. Which of the following statements is not true regarding this income differential?

Accepted Answer

A)  Surgeons earn more because their practice costs, including medical malpractice insurance is higher. 
B)  Surgeons earn more to compensate them for the extra years spent as residents. 
C)  Physicians' incomes are determined to a large extent by supply and demand conditions with respect to each specialty. 
D)  Surgeons will always earn more than general practitioners because they are smarter than general practitioners. 
E)  Surgeons earn more than general practitioners because cutting into people is messy. 
A)  Surgeons earn more because their practice costs, including medical malpractice insurance is higher. 
B)  Surgeons earn more to compensate them for the extra years spent as residents. 
C)  Physicians' incomes are determined to a large extent by supply and demand conditions with respect to each specialty. 
D)  Surgeons will always earn more than general practitioners because they are smarter than general practitioners. 
E)  Surgeons earn more than general practitioners because cutting into people is messy.

Question 11

Empirical studies that suggest differences in utilization rates between fee-for-service and managed care plans

Accepted Answer

A)  are unreliable due to statistical biases. 
B)  conclude that financial incentives are not the reason for differences in the amount of care physician provide. 
C)  show no differences in health status among patient groups. 
D)  are unable to differentiate between the impacts due to financial incentives and those due to clinical rules. 
A)  are unreliable due to statistical biases. 
B)  conclude that financial incentives are not the reason for differences in the amount of care physician provide. 
C)  show no differences in health status among patient groups. 
D)  are unable to differentiate between the impacts due to financial incentives and those due to clinical rules.

Question 12

The observed variations in practice patterns in different regions of the country are difficult to eliminate

Accepted Answer

A)  because of the many alternative treatment options available for most ailments. 
B)  due to the localized nature of most medical practice. 
C)  because it is difficult to change the preferences of physicians and patients. 
D)  the observed variations are so minor that they are of little concern to policy makers. 
E)  responses a, b, and c are all true. 
A)  because of the many alternative treatment options available for most ailments. 
B)  due to the localized nature of most medical practice. 
C)  because it is difficult to change the preferences of physicians and patients. 
D)  the observed variations are so minor that they are of little concern to policy makers. 
E)  responses a, b, and c are all true.

Question 13

What is the most significant cost of attending medical school?

Accepted Answer

A)  Tuition and fees. 
B)  Books and incidentals. 
C)  The income foregone. 
D)  Room and board. 
E)  Pain and suffering. 
A)  Tuition and fees. 
B)  Books and incidentals. 
C)  The income foregone. 
D)  Room and board. 
E)  Pain and suffering.

Question 14

Physicians who own their own diagnostic testing facilities tend to order more tests, charge higher fees for them, and have higher total bills to patients. This practice of self-referral is an example of

Accepted Answer

A)  moral hazard. 
B)  adverse selection. 
C)  res ipsa loquitor. 
D)  physician-induced demand. 
E)  cognitive dissonance. 
A)  moral hazard. 
B)  adverse selection. 
C)  res ipsa loquitor. 
D)  physician-induced demand. 
E)  cognitive dissonance.

Question 15

The rate of return on an investment in medical education

Accepted Answer

A)  is inversely related to the length of time spent in formal schooling. 
B)  is inversely related to income. 
C)  will increase with an increase in the availability of student loans. 
D)  is much higher than the rate of return on an undergraduate business degree. 
E)  is inversely related to the number of years in the profession. 
A)  is inversely related to the length of time spent in formal schooling. 
B)  is inversely related to income. 
C)  will increase with an increase in the availability of student loans. 
D)  is much higher than the rate of return on an undergraduate business degree. 
E)  is inversely related to the number of years in the profession.

Question 16

Starting salaries for female OB/GYNs are higher than those of male OB/GYNs. What is the best explanation for this?

Accepted Answer

A)  Female OB/GYNs have more human capital than male OB/GYNs. 
B)  Female OB/GYNs are smarter than male OB/GYNs. 
C)  The demand for female OB/GYNs is greater than the demand for male OB/GYNs. 
D)  The demand for female OB/GYNs is less than the demand for male OB/GYNs. 
E)  More males are in OB/GYN residency programs than females. 
A)  Female OB/GYNs have more human capital than male OB/GYNs. 
B)  Female OB/GYNs are smarter than male OB/GYNs. 
C)  The demand for female OB/GYNs is greater than the demand for male OB/GYNs. 
D)  The demand for female OB/GYNs is less than the demand for male OB/GYNs. 
E)  More males are in OB/GYN residency programs than females.

Question 17

An important element in estimating the present value of an investment is the calculation of the discount factor. The discount factor may be expressed as _______ where r is the discount rate and n is the number of years the investment is held.

Accepted Answer

A)  1 + r)n 
B)  1 + n)r 
C)  1/1 + r)n 
D)  1/1 + n)r 
A)  1 + r)n 
B)  1 + n)r 
C)  1/1 + r)n 
D)  1/1 + n)r

Input demand is called derived demand because

Suppose the market for nursing services in a local community is so dominated by a singly community hospital that for all practical purposes it is considered a monopsony. Using the diagram below, answer questions 1-2. -What is the equilibrium wage and level of employment under monopsony?

Which of the following statements about the distribution of physicians among specialties is true in the United States?

Physicians salaries increased substantially over the decade 1995-2005 from an average of $215,000 to $315,000. What is the best explanation for this?

Which of the following would increase the supply of physicians?

In 2010, the medical specialty that earned the highest rate of return on investment was

Suppose the number of medical school graduates continues to increase over the next decade. Which of the following is true?

To address the shortage of physicians on the horizon, it will be necessary to

Surgical specialists earn more than general/family practice physicians. Which of the following statements is not true regarding this income differential?

Empirical studies that suggest differences in utilization rates between fee-for-service and managed care plans

The observed variations in practice patterns in different regions of the country are difficult to eliminate

What is the most significant cost of attending medical school?

Physicians who own their own diagnostic testing facilities tend to order more tests, charge higher fees for them, and have higher total bills to patients. This practice of self-referral is an example of

The rate of return on an investment in medical education

Starting salaries for female OB/GYNs are higher than those of male OB/GYNs. What is the best explanation for this?

An important element in estimating the present value of an investment is the calculation of the discount factor. The discount factor may be expressed as _______ where r is the discount rate and n is the number of years the investment is held.

US Medical Care: an Uncertain Future

Using Economics to Study Health Care Issues

Analyzing Medical Care Markets

Economic Evaluation in Health Care

The Demand for Health and Medical Care

Population Health

The Market for Health Insurance

Managed Care

The Hospital Services Market

The Market for Pharmaceuticals

Medicare

Medicaid

Medical Care Systems Worldwide

Filters

Exam 9: The Physicians Services Market

Input demand is called derived demand because

Suppose the market for nursing services in a local community is so dominated by a singly community hospital that for all practical purposes it is considered a monopsony. Using the diagram below, answer questions 1-2. -What is the equilibrium wage and level of employment under monopsony?

Which of the following statements about the distribution of physicians among specialties is true in the United States?

Physicians salaries increased substantially over the decade 1995-2005 from an average of $215,000 to $315,000. What is the best explanation for this?

Which of the following would increase the supply of physicians?

In 2010, the medical specialty that earned the highest rate of return on investment was

Suppose the number of medical school graduates continues to increase over the next decade. Which of the following is true?

To address the shortage of physicians on the horizon, it will be necessary to

Surgical specialists earn more than general/family practice physicians. Which of the following statements is not true regarding this income differential?

Empirical studies that suggest differences in utilization rates between fee-for-service and managed care plans

The observed variations in practice patterns in different regions of the country are difficult to eliminate

What is the most significant cost of attending medical school?

Physicians who own their own diagnostic testing facilities tend to order more tests, charge higher fees for them, and have higher total bills to patients. This practice of self-referral is an example of

The rate of return on an investment in medical education

Starting salaries for female OB/GYNs are higher than those of male OB/GYNs. What is the best explanation for this?

An important element in estimating the present value of an investment is the calculation of the discount factor. The discount factor may be expressed as _______ where r is the discount rate and n is the number of years the investment is held.

US Medical Care: an Uncertain Future

Using Economics to Study Health Care Issues

Analyzing Medical Care Markets

Economic Evaluation in Health Care

The Demand for Health and Medical Care

Population Health

The Market for Health Insurance

Managed Care

The Hospital Services Market

The Market for Pharmaceuticals

Medicare

Medicaid

Medical Care Systems Worldwide

Filters