Question 1

One proposal for solving the social security problem is privatization.This means:

Accepted Answer

A) refusing to provide retirement benefits,thereby forcing people to use private savings. 
B) providing retirement benefits only to those who had worked for a private firm. 
C) providing retirement benefits only to those who also save privately. 
D) allowing participants to choose how their tax funds are to be invested. 
E) preventing participants from paying taxes on their retirement income. 
A) refusing to provide retirement benefits,thereby forcing people to use private savings. 
B) providing retirement benefits only to those who had worked for a private firm. 
C) providing retirement benefits only to those who also save privately. 
D) allowing participants to choose how their tax funds are to be invested. 
E) preventing participants from paying taxes on their retirement income.

Question 2

Why does the demand curve for human organs tend to be relatively price inelastic?

Accepted Answer

A) The demand for human organs change substantially with change in price. 
B) The people in demand of the organs are ready to pay almost anything to get the organs. 
C) The supply of human organs tend to be greater than the demand for the organs. 
D) There are a large number of people in the market for human organs who are in need of them but cannot afford them. 
E) There is a presence of strong parallel or underground market for the human organs. 
A) The demand for human organs change substantially with change in price. 
B) The people in demand of the organs are ready to pay almost anything to get the organs. 
C) The supply of human organs tend to be greater than the demand for the organs. 
D) There are a large number of people in the market for human organs who are in need of them but cannot afford them. 
E) There is a presence of strong parallel or underground market for the human organs.

Question 3

The social security taxes that the working population pays today are used to provide benefits for current retirees.

Accepted Answer

A) True 
 B)False

Question 4

One way in which the U.S.government can reduce the deficit in the social security fund is by lowering the social security tax rate.

Accepted Answer

A) True 
 B)False

Question 5

Direct payments for medical care consist of out-of-pocket payments made by individuals,copayments,and deductibles required by many third-party payers.

Accepted Answer

A) True 
 B)False

Question 6

The American Medical Association encourages the young physicians to advertise to attract more patients.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is true of the demand curve for medical care?

Accepted Answer

A) The demand curve for medical care is infinitely elastic. 
B) The demand curve for medical care is relatively inelastic. 
C) The demand curve for medical care shifts upward due to an increase in the price of medical care. 
D) The demand curve for medical care is relatively flatter than the supply curve of medical care. 
E) The demand curve for medical care is horizontal at the equilibrium price of medical care. 
A) The demand curve for medical care is infinitely elastic. 
B) The demand curve for medical care is relatively inelastic. 
C) The demand curve for medical care shifts upward due to an increase in the price of medical care. 
D) The demand curve for medical care is relatively flatter than the supply curve of medical care. 
E) The demand curve for medical care is horizontal at the equilibrium price of medical care.

Question 8

The figure given below represents demand for and supply of hospital beds in Anytown,U.S.A.,as shown by curves D and SS1U1B11 S1U1B0in the following figure.If the hospital receives permission to expand,its new supply curve will be SS1U1B12S1U1B0.Price level PS1U1B11S1U1B0 is the fixed prospective payment reimbursement rate paid by Medicare to the hospital,regardless of actual cost. Figure 18.3
 
-According to Figure 18.3,given the existing demand for its beds,after the hospital completes its expansion it will maximize its occupancy rate by charging a price level:

Accepted Answer

A) P1. 
B) P2. 
C) P3. 
D) (P1+ P2)/2. 
E) P3-P1. 
A) P1. 
B) P2. 
C) P3. 
D) (P1+ P2)/2. 
E) P3-P1.

Question 9

As per the payment system laid down by the American Medical Association the physicians are reimbursed on the basis of their speciality.

Accepted Answer

A) True 
 B)False

Question 10

It has been pointed out that there is a unidirectional flow of human organs- from poor to rich,from the Third World to the First World.

Accepted Answer

A) True 
 B)False

Question 11

The figure below shows the demand (AD) and supply (SSS1U1B11S1U1B0) curves of medical care. Figure 18.4
 
-In Figure 18.4,which of the following regions on the graph represents those people who are not willing and able to pay the price P1 for availing medical care?

Accepted Answer

A) AE 
B) SE 
C) AD 
D) ED 
E) ES1 
A) AE 
B) SE 
C) AD 
D) ED 
E) ES1

Question 12

The social security tax proceeds are often used to purchase government bonds.

Accepted Answer

A) True 
 B)False

Question 13

Physicians' fees have risen rapidly in the face of an expanding supply of physicians in the last two decades.Which of the following reasons best explains this phenomenon?

Accepted Answer

A) Restrictions on advertising enable established physicians to keep new,entering physicians from competing for their customers. 
B) Fees charged by physicians are fixed by the government. 
C) Consumers are able to obtain complete information about fees or professional qualities of the physicians. 
D) Restrictions on physicians' freedom to relocate within certain geographic boundaries have led to price fixing within the medical profession. 
E) The demand for physicians' services has steadily declined over the past three decades. 
A) Restrictions on advertising enable established physicians to keep new,entering physicians from competing for their customers. 
B) Fees charged by physicians are fixed by the government. 
C) Consumers are able to obtain complete information about fees or professional qualities of the physicians. 
D) Restrictions on physicians' freedom to relocate within certain geographic boundaries have led to price fixing within the medical profession. 
E) The demand for physicians' services has steadily declined over the past three decades.

Question 14

The following figure shows the demand (D) and supply (S) curves of human organs Figure 18.5
 
-Which of the following factors might have led to a fall in the price of human organs from P2 to P3 in Figure 18.5?

Accepted Answer

A) A decline in supply of human organs in the black market 
B) An increase in demand for human organs 
C) Increased supply of alternatives to organs created by technological changes 
D) A restriction imposed by the government on trading in human organs 
E) Reduced motivation among the donors to donate their organs 
A) A decline in supply of human organs in the black market 
B) An increase in demand for human organs 
C) Increased supply of alternatives to organs created by technological changes 
D) A restriction imposed by the government on trading in human organs 
E) Reduced motivation among the donors to donate their organs

Question 15

Which of the following is a consequence of government programs like Medicare and Medicaid?

Accepted Answer

A) Increased cost of medical care 
B) Increased price elasticity of demand for medical care 
C) Increase in the the number of private health insurance companies 
D) Increased demand for health care 
E) Increase in the marginal cost of medical care 
A) Increased cost of medical care 
B) Increased price elasticity of demand for medical care 
C) Increase in the the number of private health insurance companies 
D) Increased demand for health care 
E) Increase in the marginal cost of medical care

Question 16

One of the myths about social security is that the government runs a surplus in the Social Security Trust Fund.Which of the following debunks this myth?

Accepted Answer

A) The number of people retiring every year has steadily declined since 1950. 
B) There are no trust funds and the proceeds from the social security taxes are used to purchase Treasury bonds. 
C) The number of people joining the workforce is increasing over time. 
D) The social security taxes has been increased by the government since 1990. 
E) The retirees receive much less than the amount paid by the current workers under the pay-as-you go system. 
A) The number of people retiring every year has steadily declined since 1950. 
B) There are no trust funds and the proceeds from the social security taxes are used to purchase Treasury bonds. 
C) The number of people joining the workforce is increasing over time. 
D) The social security taxes has been increased by the government since 1990. 
E) The retirees receive much less than the amount paid by the current workers under the pay-as-you go system.

Question 17

Government restrictions prevent the market from allocating resources to where they have the highest value.

Accepted Answer

A) True 
 B)False

Question 18

The ratio of the number of people in the population aged 65 and older to the number of people aged 20 to 64 has risen in most of the developed countries as:

Accepted Answer

A) longevity has declined and the families have had many children. 
B) the family planning laws have been relaxed. 
C) birth rates have increased over time. 
D) there has been an increased preference for male child. 
E) longevity has increased and the families have had fewer children. 
A) longevity has declined and the families have had many children. 
B) the family planning laws have been relaxed. 
C) birth rates have increased over time. 
D) there has been an increased preference for male child. 
E) longevity has increased and the families have had fewer children.

Question 19

Which of the following can increase the price of medical care even if the demand for medical care remains constant?

Accepted Answer

A) Decrease in the cost of medical care 
B) Availability of high end technology in modern medical care 
C) Increase in the cost of medical care 
D) General improvement in the standard of living 
E) An increase in preference for herbal medicines among people 
A) Decrease in the cost of medical care 
B) Availability of high end technology in modern medical care 
C) Increase in the cost of medical care 
D) General improvement in the standard of living 
E) An increase in preference for herbal medicines among people

Question 20

Which of the following is a joint federal and state health program that pays for the health care of poor families and disabled?

Accepted Answer

A) Medicure 
B) Medicare 
C) Mediaid 
D) Medicaid 
E) Mediclaim 
A) Medicure 
B) Medicare 
C) Mediaid 
D) Medicaid 
E) Mediclaim

Exam 18: Aging, Social Security and Health Care

One proposal for solving the social security problem is privatization.This means:

Why does the demand curve for human organs tend to be relatively price inelastic?

The social security taxes that the working population pays today are used to provide benefits for current retirees.

One way in which the U.S.government can reduce the deficit in the social security fund is by lowering the social security tax rate.

Direct payments for medical care consist of out-of-pocket payments made by individuals,copayments,and deductibles required by many third-party payers.

The American Medical Association encourages the young physicians to advertise to attract more patients.

Which of the following is true of the demand curve for medical care?

As per the payment system laid down by the American Medical Association the physicians are reimbursed on the basis of their speciality.

It has been pointed out that there is a unidirectional flow of human organs- from poor to rich,from the Third World to the First World.

The figure below shows the demand (AD) and supply (SS1) curves of medical care. Figure 18.4 -In Figure 18.4,which of the following regions on the graph represents those people who are not willing and able to pay the price P1 for availing medical care?

The social security tax proceeds are often used to purchase government bonds.

Physicians' fees have risen rapidly in the face of an expanding supply of physicians in the last two decades.Which of the following reasons best explains this phenomenon?

The following figure shows the demand (D) and supply (S) curves of human organs Figure 18.5 -Which of the following factors might have led to a fall in the price of human organs from P2 to P3 in Figure 18.5?

Which of the following is a consequence of government programs like Medicare and Medicaid?

One of the myths about social security is that the government runs a surplus in the Social Security Trust Fund.Which of the following debunks this myth?

Government restrictions prevent the market from allocating resources to where they have the highest value.

The ratio of the number of people in the population aged 65 and older to the number of people aged 20 to 64 has risen in most of the developed countries as:

Which of the following can increase the price of medical care even if the demand for medical care remains constant?

Which of the following is a joint federal and state health program that pays for the health care of poor families and disabled?

Economics: The World Around You

Choice, opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

Elasticity: Demand and Supply

Consumer Choice

Supply: The Costs of Doing Business

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Income Distribution,Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters

The figure below shows the demand (AD) and supply (SS₁) curves of medical care. Figure 18.4 -In Figure 18.4,which of the following regions on the graph represents those people who are not willing and able to pay the price P₁ for availing medical care?

The following figure shows the demand (D) and supply (S) curves of human organs Figure 18.5 -Which of the following factors might have led to a fall in the price of human organs from P₂ to P₃ in Figure 18.5?