Question 1

Many doctors, lawyers, and economists opine that an existence of a legal market for human organs will help cure their chronic shortage that is gripping transplant medicine.

Accepted Answer

A) True 
 B)False

Question 2

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.

Question 3

The figure given below shows the demand (D)and supply (S1 and S2)curves of medical care. Figure 32.2  Refer to Figure 32.1.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.

Question 4

The elderly support ratio recorded by the U.S.Bureau of the Census in 1985 is expected to rise post 2005 because:

Accepted Answer

A) a large number of people born between 1946 and 1961 would still be in the labor force. 
B) the cost of medical care would increase over time. 
C) the availability of medical care would decline in future. 
D) a large working-age population would retire. 
E) population of every economy would continue to rise.

Question 5

The social security system in the United States, which covers both social security and hospital insurance is financed by a:

Accepted Answer

A) value added tax. 
B) payroll tax. 
C) insurance tax. 
D) property tax. 
E) mortgage registry tax.

Question 6

The bulk of the cost of hospital care is borne by third-parties.Such third-parties are:

Accepted Answer

A) relatives and friends. 
B) financial institutions. 
C) insurance companies. 
D) voluntary organizations. 
E) employers.

Question 7

Why are black markets for human organs less efficient than free markets?

Accepted Answer

A) Prices are lower in black markets than in free markets. 
B) Traders are discreet in free markets. 
C) There are a more traders in the black market compared to the free markets. 
D) Buyers cannot meet openly with the sellers in black market as they can in free markets. 
E) There is a steady supply of human organs in the free market while the supply in black market is unpredictable.

Question 8

The American Medical Association's payment system is an example of a:

Accepted Answer

A) price floor. 
B) price ceiling. 
C) tariff. 
D) barrier to entry. 
E) quota.

Question 9

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 10

"Rising health care costs might be considered a vicious circle.As health care costs rise, people want more, and this drives up demand, which in turn increases health care costs." What is wrong with this statement?

Accepted Answer

A) If prices rise, people do not demand more. 
B) If costs rise, people are not willing and able to purchase more if they have to pay for the health care. 
C) If an increase in demand for health care is matched with an equal increase in supply, the cost of health care remains unaffected. 
D) Demand does not rise simply because health care costs rise. 
E) Health care costs do not rise simply because demand increases.

Question 11

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.

Question 12

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.

Question 13

The ratio of workers to social security beneficiaries has declined from 16.5 in 1950 to about 3 in 2010 and is expected to decline to 2 by 2030.This trend indicates that:

Accepted Answer

A) the surplus generated from the social security fund is going to increase over time. 
B) the revenue generated by the government from the social taxes is going to decline by 2030. 
C) the strength of the U.S.labor force will shrink over time. 
D) the social security contributions will fall short of the social security payments over time. 
E) the number of retirees will gradually decline and the youth employment in the economy will increase.

Question 14

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 32.3  According to Figure 32.3, 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

Question 15

The money raised from the social security taxes is used:

Accepted Answer

A) to invest in foreign bonds. 
B) to invest in domestic interest bearing assets. 
C) to meet recurring government expenditures. 
D) to fund the unemployment insurance program. 
E) to fund the scholarship programs in foreign universities.

Question 16

The existence of new drugs reduces the demand for drugs as they are highly expensive.

Accepted Answer

A) True 
 B)False

Question 17

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

Question 18

The following figure shows the demand (D)and supply (S)curves of human organs Figure 32.5  In Figure 32.5, the equilibrium quantity of human organs in the market is:

Accepted Answer

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

Question 19

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.

Question 20

The high cost of hospital care in the U.S.is primarily attributable to:

Accepted Answer

A) the way in which capital purchases are financed. 
B) the increased occupancy rate in the hospitals. 
C) the lack of sufficient hospital beds. 
D) the greater availability of physicians. 
E) the increased malpractice by the physicians.

Exam 53: Aging, Social Security and Health Care

Many doctors, lawyers, and economists opine that an existence of a legal market for human organs will help cure their chronic shortage that is gripping transplant medicine.

Which of the following is a myth about social security?

The figure given below shows the demand (D) and supply (S₁ and S₂) curves of medical care. Figure 32.2 Refer to Figure 32.1.The possible reason behind the shift of the supply curve from S₁ to S₂is:

The elderly support ratio recorded by the U.S.Bureau of the Census in 1985 is expected to rise post 2005 because:

The social security system in the United States, which covers both social security and hospital insurance is financed by a:

The bulk of the cost of hospital care is borne by third-parties.Such third-parties are:

Why are black markets for human organs less efficient than free markets?

The American Medical Association's payment system is an example of a:

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.

"Rising health care costs might be considered a vicious circle.As health care costs rise, people want more, and this drives up demand, which in turn increases health care costs." What is wrong with this statement?

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

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

The ratio of workers to social security beneficiaries has declined from 16.5 in 1950 to about 3 in 2010 and is expected to decline to 2 by 2030.This trend indicates that:

The money raised from the social security taxes is used:

The existence of new drugs reduces the demand for drugs as they are highly expensive.

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

The following figure shows the demand (D) and supply (S) curves of human organs Figure 32.5 In Figure 32.5, the equilibrium quantity of human organs in the market is:

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

The high cost of hospital care in the U.S.is primarily attributable to:

Exam 53: Aging, Social Security and Health Care

Many doctors, lawyers, and economists opine that an existence of a legal market for human organs will help cure their chronic shortage that is gripping transplant medicine.

Which of the following is a myth about social security?

The figure given below shows the demand (D) and supply (S1 and S2) curves of medical care. Figure 32.2 Refer to Figure 32.1.The possible reason behind the shift of the supply curve from S1 to S2 is:

The elderly support ratio recorded by the U.S.Bureau of the Census in 1985 is expected to rise post 2005 because:

The social security system in the United States, which covers both social security and hospital insurance is financed by a:

The bulk of the cost of hospital care is borne by third-parties.Such third-parties are:

Why are black markets for human organs less efficient than free markets?

The American Medical Association's payment system is an example of a:

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.

"Rising health care costs might be considered a vicious circle.As health care costs rise, people want more, and this drives up demand, which in turn increases health care costs." What is wrong with this statement?

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

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

The ratio of workers to social security beneficiaries has declined from 16.5 in 1950 to about 3 in 2010 and is expected to decline to 2 by 2030.This trend indicates that:

The money raised from the social security taxes is used:

The existence of new drugs reduces the demand for drugs as they are highly expensive.

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

The following figure shows the demand (D) and supply (S) curves of human organs Figure 32.5 In Figure 32.5, the equilibrium quantity of human organs in the market is:

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

The high cost of hospital care in the U.S.is primarily attributable to:

The figure given below shows the demand (D) and supply (S₁ and S₂) curves of medical care. Figure 32.2 Refer to Figure 32.1.The possible reason behind the shift of the supply curve from S₁ to S₂is: