Question 1

If social security is privatized:

Accepted Answer

A) the contributors would receive fixed and defined retirement benefits. 
B) the contributors would earn on the basis of pay-as-you-go system. 
C) individuals would be paid on the basis of their incomes. 
D) individuals would earn returns on their investments made out of their savings. 
E) individuals would not be required to pay taxes and hence would receive no benefit. 
A) the contributors would receive fixed and defined retirement benefits. 
B) the contributors would earn on the basis of pay-as-you-go system. 
C) individuals would be paid on the basis of their incomes. 
D) individuals would earn returns on their investments made out of their savings. 
E) individuals would not be required to pay taxes and hence would receive no benefit.

Question 2

Which of the following statements is true of the market for prescription drugs in the U.S.?

Accepted Answer

A) The FDA encourages the entry of new drugs in the market. 
B) The time required to bring a new drug to the market has declined over time. 
C) The drug manufacturing firms enjoy economies of scale, hence the cost of producing new drugs have declined. 
D) More than 60 percent of the biopharmaceutical products approved in the U.S.originated either in Europe or in Japan. 
E) The latest estimate of the cost to develop a new drug and bring it to market exceeds $800 million. 
A) The FDA encourages the entry of new drugs in the market. 
B) The time required to bring a new drug to the market has declined over time. 
C) The drug manufacturing firms enjoy economies of scale, hence the cost of producing new drugs have declined. 
D) More than 60 percent of the biopharmaceutical products approved in the U.S.originated either in Europe or in Japan. 
E) The latest estimate of the cost to develop a new drug and bring it to market exceeds $800 million.

Question 3

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 4

Which of the following is a myth about social security?

Accepted Answer

A) The money deposited by the depositors belong to the government. 
B) The social security fund is economically unviable. 
C) There can be deficit in the Social Security Trust Fund. 
D) The social security fund benefits only the low income earners and unemployed youth. 
E) Social security ensures that only the elderly poor are cared for. 
A) The money deposited by the depositors belong to the government. 
B) The social security fund is economically unviable. 
C) There can be deficit in the Social Security Trust Fund. 
D) The social security fund benefits only the low income earners and unemployed youth. 
E) Social security ensures that only the elderly poor are cared for.

Question 5

Medicare helps only the neediest people, including many elderly people whose Medicaid benefits have run out.

Accepted Answer

A) True 
 B)False

Question 6

The figure given below represents demand for and supply of hospital beds in Anytown, U.S.A. , as shown by curves D and S1 in the following figure.If the hospital receives permission to expand, its new supply curve will be S2.Price level P1 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, the surplus of beds caused by the fixed reimbursement rate, after the expansion of the hospital is the difference between _____ and _____.

Accepted Answer

A) Q5;Q1 
B) Q5;Q2 
C) Q4;Q2 
D) Q3;Q2 
E) Q3;Q1 
A) Q5;Q1 
B) Q5;Q2 
C) Q4;Q2 
D) Q3;Q2 
E) Q3;Q1

Question 7

Demand for medical care remaining constant, if the supply of medical care is decreased, the price of medical care increases.

Accepted Answer

A) True 
 B)False

Question 8

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 9

Why didn't the supply of medical care increase in the United States in spite of increase in its price?

Accepted Answer

A) Pharmacists were earlier restricted to dispense drugs but now they are allowed to do so 
B) New drugs can easily enter the U.S.market as government regulations are lax 
C) The Medicare system restricts the movement of resources from one part of the market to another 
D) Relaxation of the restrictions imposed by the U.S.government earlier 
E) The market for medical care is a free and unregulated market. 
A) Pharmacists were earlier restricted to dispense drugs but now they are allowed to do so 
B) New drugs can easily enter the U.S.market as government regulations are lax 
C) The Medicare system restricts the movement of resources from one part of the market to another 
D) Relaxation of the restrictions imposed by the U.S.government earlier 
E) The market for medical care is a free and unregulated market.

Question 10

Which of the following would not reduce the problem with the social security system?

Accepted Answer

A) Reducing the benefits paid to the retirees 
B) Paying retirement benefits only to those without any alternative source of income 
C) Increasing the minimum age for receiving retirement benefits 
D) Privatizing the system by allowing individuals to decide how to invest their social security taxes 
E) Including everyone in the Congressional retirement program 
A) Reducing the benefits paid to the retirees 
B) Paying retirement benefits only to those without any alternative source of income 
C) Increasing the minimum age for receiving retirement benefits 
D) Privatizing the system by allowing individuals to decide how to invest their social security taxes 
E) Including everyone in the Congressional retirement program

Question 11

The figure given below represents demand for and supply of hospital beds in Anytown, U.S.A. , as shown by curves D and S1 in the following figure.If the hospital receives permission to expand, its new supply curve will be S2.Price level P1 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 12

Which of the following has led to increased cost of health services?

Accepted Answer

A) The demand for health services have declined over the time. 
B) The demand for health services has increased relative to its supply. 
C) Supply of health services have increased relative to its demand. 
D) Both demand and supply of health services have increased at the same pace. 
E) The government has invested heavily on health infrastructure. 
A) The demand for health services have declined over the time. 
B) The demand for health services has increased relative to its supply. 
C) Supply of health services have increased relative to its demand. 
D) Both demand and supply of health services have increased at the same pace. 
E) The government has invested heavily on health infrastructure.

Question 13

The American Medical Association helps increase:

Accepted Answer

A) price competition among local physicians in the same area. 
B) the ability of each physician to act as a local monopoly. 
C) freedom of physicians to advertise. 
D) consumers' ability to obtain complete information about prices or professional quality. 
E) the ability of new, entering physicians to compete with established ones by charging lower prices. 
A) price competition among local physicians in the same area. 
B) the ability of each physician to act as a local monopoly. 
C) freedom of physicians to advertise. 
D) consumers' ability to obtain complete information about prices or professional quality. 
E) the ability of new, entering physicians to compete with established ones by charging lower prices.

Question 14

A part of the supply to the human organs market comes from the organs harvested from people who die suddenly, such as those killed in accidents.

Accepted Answer

A) True 
 B)False

Question 15

Why is health care considered to be an economic good and is subject to the laws of economics?

Accepted Answer

A) Health care at times can be obtained even without paying a price for it. 
B) Health care is easily available. 
C) The supply of health care is greater than its demand. 
D) Health care is a social good available at subsidized rates to the poor. 
E) Supply of health care is scarce compared to its demand. 
A) Health care at times can be obtained even without paying a price for it. 
B) Health care is easily available. 
C) The supply of health care is greater than its demand. 
D) Health care is a social good available at subsidized rates to the poor. 
E) Supply of health care is scarce compared to its demand.

Question 16

In the context of the hospitals in the United States, which of the following statements is correct?

Accepted Answer

A) In the past 20 years, the number of beds per hospital declined by 11 percent. 
B) In the past 20 years, inpatient days increased by 43 percent. 
C) The current occupancy rate in the hospitals is around 66 percent. 
D) In the past 20 years, the length of stay in the hospitals has increased by 24 percent. 
E) In the past 20 years, the occupancy rates have increased by nearly 13 percent. 
A) In the past 20 years, the number of beds per hospital declined by 11 percent. 
B) In the past 20 years, inpatient days increased by 43 percent. 
C) The current occupancy rate in the hospitals is around 66 percent. 
D) In the past 20 years, the length of stay in the hospitals has increased by 24 percent. 
E) In the past 20 years, the occupancy rates have increased by nearly 13 percent.

Question 17

The figure given below shows the demand (D)and supply (S1 and S2)curves of medical care. Figure 18.2   Refer to Figure 18.1.The possible reason behind the shift of the supply curve from S1 to S2 is:

Accepted Answer

A) increased preference for herbal medicine among the people. 
B) increase in the marginal cost of producing medical care. 
C) increase in the per capita income of the people. 
D) economies of scale being experienced in the production of medical care. 
E) greater health consciousness among the people. 
A) increased preference for herbal medicine among the people. 
B) increase in the marginal cost of producing medical care. 
C) increase in the per capita income of the people. 
D) economies of scale being experienced in the production of medical care. 
E) greater health consciousness among the people.

Question 18

One of the major impacts of the aging of the population is:

Accepted Answer

A) increase in the production of necessary goods in the economy. 
B) increase in government revenue generation. 
C) increase in the expenditure on health care. 
D) addition to the labor force. 
E) decrease in transfer payments made by the government. 
A) increase in the production of necessary goods in the economy. 
B) increase in government revenue generation. 
C) increase in the expenditure on health care. 
D) addition to the labor force. 
E) decrease in transfer payments made by the government.

Question 19

_____ taxes have risen more rapidly in the past two decades than any other tax.

Accepted Answer

A) Social security 
B) Corporate 
C) Property 
D) Sales 
E) Income 
A) Social security 
B) Corporate 
C) Property 
D) Sales 
E) Income

Question 20

It has been argued that a worker would receive a greater return if they invest in prospective ventures than what they would earn from social security.

Accepted Answer

A) True 
 B)False

Exam 31: Aging, Social Security and Health Care

If social security is privatized:

Which of the following statements is true of the market for prescription drugs in the U.S.?

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

Which of the following is a myth about social security?

Medicare helps only the neediest people, including many elderly people whose Medicaid benefits have run out.

Demand for medical care remaining constant, if the supply of medical care is decreased, the price of medical care increases.

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?

Why didn't the supply of medical care increase in the United States in spite of increase in its price?

Which of the following would not reduce the problem with the social security system?

Which of the following has led to increased cost of health services?

The American Medical Association helps increase:

A part of the supply to the human organs market comes from the organs harvested from people who die suddenly, such as those killed in accidents.

Why is health care considered to be an economic good and is subject to the laws of economics?

In the context of the hospitals in the United States, which of the following statements is correct?

The figure given below shows the demand (D)and supply (S1 and S2)curves of medical care. Figure 18.2 Refer to Figure 18.1.The possible reason behind the shift of the supply curve from S1 to S2 is:

One of the major impacts of the aging of the population is:

_____ taxes have risen more rapidly in the past two decades than any other tax.

It has been argued that a worker would receive a greater return if they invest in prospective ventures than what they would earn from social security.

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

National Income Accounting

an Introduction to the Foreign Exchange Market and the Balance of Payments

Consumer Choice

Supply: The Costs of Doing Business

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Profit Maximization

Aggregate Expenditures

Perfect Competition

Income and Expenditures Equilibrium

Monopoly

Fiscal Policy

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Money and Banking

Market Failures, Government Failures, and Rent Seeking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Resource Markets

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

The Labor Market

Capital Markets

Economic Growth

Development Economics

the Land Market and Natural Resources

Globalization

Elasticity: Demand and Supply

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

Consumer Choice

International Trade Restrictions

World Trade Equilibrium

Exchange Rates and Financial Links Between Countries

International Trade Restrictions

Supply: the Costs of Doing Business

Exchange Rates and Financial Links Between Countries

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

Aging, Social Security and Health Care

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

Filters

The figure given below shows the demand (D)and supply (S₁ and S₂)curves of medical care. Figure 18.2 Refer to Figure 18.1.The possible reason behind the shift of the supply curve from S₁ to S₂is: