econ 251 Quiz 4

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Question 12 pts

The relationship between the value and price of a stock suggests that:

	the equilibrium price of a stock strikes a balance between those who think the stock is worth more and those who think it's worth less at the current price.
	it is the market's best guess regarding the expected value of the company's future profits.

	stocks are overvalued.
	both A and B are true.

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Question 22 pts

The market for health care is characterized by which of the following?

	dramatic increases in costs because of technological advances in medical care
	a falling fraction of the total cost the consumers of health care actually pay

	all of the above
	significant third-party payments

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Question 32 pts

Based on the exhibit and assuming that there are no third-party payers:

	at price P2 there would be a surplus.
	the equilibrium price and quantity are P3 and Q2.

	A and B are true.
	the total amount spent on health services is OP1AQ1 at price P1.

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Question 42 pts

What percentage of total health-care spending is paid by private and government insurance?

	10
	20

	50
	80

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Question 52 pts

In the mid 1960s, the percentage of total output the United States devoted to health care was about ________ percent.

	10
	2

	6
	13

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Question 62 pts

Which of the following would lead to an increase in the demand for health care?

	The average population age increases.
	Subsidies for Medicare are reduced.

	Physicians' productivity increases.
	Medicare subsidies are lowered.

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Question 72 pts

A firm owned by one individual is called a:

	partnership.
	sole proprietorship.

	none of the above.
	corporation.

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Question 82 pts

Based on the exhibit, and assuming there are no third-party payers:

	the total amount spent on health services is $80 million per week.
	At a price of $20, there would be a surplus.

	the equilibrium price and quantity are $60 and 3 million per week, respectively.
	At a price of $60, there would be a shortage.

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Question 92 pts Skip to question text.

Suppose insurance lowers the price consumers pay to P2. Compared to the situation without insurance, this would:

	increase the quantity demanded to Q2.
	have no effect on quantity demanded.

	reduce the quantity demanded to Q1.
	reduce the equilibrium price to P2.

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Question 102 pts

A persistent shortage may occur if:

	a price floor is imposed.
	all of the above occur.

	the government imposes a price ceiling.
	demand keeps falling.