American Economy 2

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  1. Price supports:
    increase pollution because supports encourage the cultivation of marginal land and the use of more pesticides and fertilizers
  2. The misallocation of resources associated with price supports:
    affects both domestic and foreign economies
  3. Equilibrium price and quantity will be:
    $3; 65,000
  4. If the government supports the price of wheat at $5 (price floor), therewill be a:
    surplus of 25,000 units of wheat
  5. The twin problems of the U.S. health care industry are:
    rapidly rising costs and unequal access to health care
  6. The largest share of government payments to farmers have gone to: 
    large farms and agribusiness
  7. Because there has been extensive technological change in agriculture:
    over time, supply has increased more than demand
  8. 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
  9. 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
  10. Which of the following is not a major contributorto world hunger?
    insufficient food production
  11. In general, which of the following is not a liberal suggestion for agricultural policy reform?
    the government should decrease or end farm programs
  12. What do physicians’ sovereignty and third-party payment have in common?
    They both increase the demand for health care
  13. Among the problems associated with U.S. health care is that:
    significant numbers of uninsured people lack access to the healthcare system
  14. What factor below encourages an over-allocation of resources to health care?
    Third-party payment
  15. Defensive medicine:
    increases the demand for health care
  16. 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
  17. What portion of U.S. total health spending ispaid for by private and public insurance? 
  18. The U.S. beer industry is a good example of:
    an oligopoly
  19. Compared to competitive markets, monopolies charge:
    higher prices, produce less output, and make higher profits
  20. 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
  21. 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
  22. 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 
  23. 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
  24. Price discrimination is:
    charging different prices to different customers when the price differences are not based on cost differences
  25. Economies of scale over a wide range of output:
    mean that cost per unit of output is lower at high levels of output
  26. The essence of market power is:
    the firm’s ability to influence the market price of its product
  27. 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
  28. 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
  29. 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
  30. The long-run problem of Social Security is that:
    the ratio of workers to recipients is declining
  31. 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:
  32. 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%?
  33. When do natural monopolies exist?
    When there is a large decreasing average cost curve associated with the industry
  34. 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
  35. 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
  36. What is the goal of a monopoly?
    To maximize profits
  37. 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
  38. 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
  39. 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
Card Set:
American Economy 2
2012-12-06 06:15:48
American Economy

American Economy 2
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