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Price supports:
increase pollution because supports encourage the cultivation of marginal land and the use of more pesticides and fertilizers
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The misallocation of resources associated with price supports:
affects both domestic and foreign economies
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Equilibrium price and quantity will be:
$3; 65,000
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If the government supports the price of wheat at $5 (price floor), therewill be a:
surplus of 25,000 units of wheat
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The twin problems of the U.S. health care industry are:
rapidly rising costs and unequal access to health care
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The largest share of government payments to farmers have gone to:
large farms and agribusiness
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Because there has been extensive technological change in agriculture:
over time, supply has increased more than demand
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When we say that price supports interfere with the rationing function of price, we mean that:
price supports do not allow the price to fall to the equilibrium level, thereby eliminating the surplus
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Target prices differ from price supports in that:
- all of the above:
- target prices indirectly subsidize both domestic and international buyers, no surplus is created, it is easier to calculate the cost of the policy than with price supports
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Which of the following is not a major contributorto world hunger?
insufficient food production
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In general, which of the following is not a liberal suggestion for agricultural policy reform?
the government should decrease or end farm programs
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What do physicians’ sovereignty and third-party payment have in common?
They both increase the demand for health care
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Among the problems associated with U.S. health care is that:
significant numbers of uninsured people lack access to the healthcare system
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What factor below encourages an over-allocation of resources to health care?
Third-party payment
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Defensive medicine:
increases the demand for health care
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Which of the following have frequently been suggested as ways to slow down increases in U.S. health care costs?
Managed care plans instead of traditional fee-for-service insurance
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What portion of U.S. total health spending ispaid for by private and public insurance?
four-fifths
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The U.S. beer industry is a good example of:
an oligopoly
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Compared to competitive markets, monopolies charge:
higher prices, produce less output, and make higher profits
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When economists say that health care services are overconsumed, they mean that:
some resources now used in the health care industry could produce alternative goods and services that society values more highly
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Given the availability of the Medicaid program, why are so many poor peopleuninsured?
Because many poor people earn enough that they do not qualify for Medicaid
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Which of the following best describes the market of a commodity such as wheat?
the inelastic demand means that a bumper crop will most likely decrease farmers incomes
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With supply restriction programs, the supply curve of agriculture continued to increase. Which of the following reasons would you give to explain this result:
Farmers did not farm on their less fertile land and over-farmed the fertile land
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Price discrimination is:
charging different prices to different customers when the price differences are not based on cost differences
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Economies of scale over a wide range of output:
mean that cost per unit of output is lower at high levels of output
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The essence of market power is:
the firm’s ability to influence the market price of its product
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When we say that the competitive firm is a price taker, we mean that:
the output of the firm is too small to influence the market price of the product
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Which of the following is true about target prices with deficiency payments:
Farmers like them because they receive a higher price for their product and sell more of their product
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A major difference between social insurance and public assistance programs is that:
social insurance covers the entire eligible population, but public assistance coversonly the needy
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The long-run problem of Social Security is that:
the ratio of workers to recipients is declining
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Atax takes $2,000 from Joe whose total income is $20,000. The tax takes $3,000 fromJames whose income is $40,000. The tax is:
regressive
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What is the four firm concentration ratio for the beer industry if there are 5 firms in the industry and the percentage of output produced by the firms is 8%, 12%, 25%, 33% and 22%?
92%
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When do natural monopolies exist?
When there is a large decreasing average cost curve associated with the industry
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In the Taking Sides essay, “Is Obamacare a Disaster for the Economy,” the authors discuss the history of health care legislation, and mention that Medicare and Medicaid became law under who’s administration.
President Johnson
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In her essay, “Top 10 Disasters of Obamacare,” Kathryn Nix does not include which one of the following in her top 10 list?
Increase Medicare costs
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What is the goal of a monopoly?
To maximize profits
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Which of the following are true about Social Security:
- all of the above:
- It’s the largest government program in the world, It is primarily funded through FICA, It was originally signed into law by FDR as part of the New Deal
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If Judy makes $50,000 a year and Ron makes $200,000 and they have to pay a tax through FICA to fund Social Security. Which of the following would you say is most likely the case given how the current tax works:
A smaller percentage of Ron’s income will go toward the tax
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Which of the following best explains a way in which Social Security, in general, is regressive:
On average wealthy people live longer so they can tap into these benefits for a longer period of time
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