Microeconomics Final Study Guide Flashcards
If two nations have straight line production possibilities curve
There will be a basis for mutually advantageous trade provided the slopes differ
One of the peculiarities of the U.S. market for health care is
Third-party payments by insurance companies
Pay plans that are designed to elicit a desired level of performance from workers are generally called
Pay for performance plans
If the government tightens up on drug dealers and raises the costs of dealing drugs, then the drug addicts’ dollar expenditures to feed their addiction will tend to
Increase because their demand is price-inelastic
The long run is characterized by
The ability of the firm to change its plant size
Consider the supply and demand curves depicted in the diagram above. If the government imposed a price ceiling of $15,then sellers will be willing to sell ___, and a black market could develop where the price would be ____.
24 units, above $15
which of the following occupations is among the 10 projected most rapidly declining U.S. occupations in terms of percentage decreases from 2016 to 2026
Computer operators
Which of the following is a supply factor in the health care market?
Slow productivity growth in the health care industry
Which of the following is a public assistance or welfare program as opposed to a social insurance program
Supplemental Security Income (SSI)
Pure monopolists may contain profits in the long run because
Of barriers to entry
Monopolistic competition means
Many firms producing differentiated products
Which of the following statements applies to the Social Security program?
It is finished by payroll taxes on employees and employers
Social insurance programs partially replace income that has been lost due to the following, except
Resignation from a job
According to the U.S. Bureau of Labor Statistics data on wage , which of the following professions paid the highest average annual wage in 2017?
Anesthesiologists
If all workers were tity homogeneous, all jobs were equally attractive to workers, and labor markets were perfectly competitive,
All workers would receive the same wage rate
Suppose the price of the product that labor is producing increases and simultaneously the price of capital, which is substitutable for labor, decreases. Assuming that the substitution effect is greater than the output effect, the demand for labor
Will decrease
A decrease in supply holding demand constant, will cause
Higher prices and a smaller quantity sold
If an ceiling price is placed on hamburgers, then
The quantity demand will exceed the quantity supplied, a black market for hamburgers may evolve, the price charged will be below the market clearing price, (All these choices are correct)
The principle of comparative advantage indicates that mutually beneficial international trade can take place only when
Relative costs of production differ between nations
The demand for health care in industrially economies is
About unit elasticity with respect to income and relatively inelastic with respect to price
Incentive pay plans that seek to the worker compensation more closely to worker performance include the following. except
A seniority-based pay scale
In Germany, one worker can produce either one cuckoo clock or one beer mug. In Taiwan, one worker can produce either two cuckoo clocks or three beer mugs. Who has the competitive advantage in each good?
Germany in clocks, Taiwan in mugs
Use the graph to answer the question about the labor resource market faced by producers of good X. What will shift D2 to D1?
An increase in the price of a substitute input (If the output effect > substitution effect)
The tables give production data for two countries, Alpha and Beta, which have populations of equal size. Beta
Should specialize in catching fish and trade with Alpha for chips
Which of the following is a feature of a purely competitive market?
Products are standardized or homogeneous
Which of the following is true under conditions of pure competition ?
No single firm cam influence the market price by changing its production level
Suppose capital is readily substitutable for labor and that the price of capital falls. We can conclude that the
Substitution effect will tend to reduce the demand for labor
In industrially advanced countries, the price elasticity of demand for health care is about
0.2
Refer to the table. Suppose that demand is represented by columns (3) and (2) and supply is represented by columns (3) and (5). If the price were actually set at $6
A shortage of 40 units would occur
The elasticity of supply of product X is unitary if the price of X rises by
8 percent and quantity supplied rises by 8 percent
Which of the following statements is most accurate about the occupations projected to be the fastest growing in the U.S. is terms of percentage increases from 2016 to 2026 ?
Half are in health care related professions
Medicare and Medicaid sell their payment rates for medical services above marginal cost, but below average total cost. One major consequence of doing this that hospitals and other providers are then
Passing the uncovered costs on to patients with private health insurance
Refer to the graph of a hypothetical market for health care. Assume that health insurance pays four-fifths of the costs of health care. The consumer will end up consuming how many units of health care and pay (out-of-pocket) how much for it per unit?
600 units, for $20 per unit
An inflow of investment funds into the United States from overseas is likely to result from a(n)
Rise in U.S. interest rates relative to the world interest rates
An industry having a four-firm concentration ratio of 30 percent
Is monopolistically competitive
Refer to the given diagram, in which line AB is the U.S. production possibilities curve and AC is its trading possibilities curve. The international exchange ratio between beef and cheese (terms of trade)
Is the absolute value of the slope of line AC
A college graduate who works at a firm is also working part-time on a master’s degree in business and expects to be paid a higher wage after earning the degree. The basic reason for this wage difference is
Investment in human capital
The impact of increasing, as opposed to constant, costs is to
Cause the bases for further specialization to disappear as anions specialize according to comparative advantage
The supply curve of a one-of-a-kind original painting is
Perfectly inelastic
The following are supply factors in the health care market, except
Health care insurance
The medically uninsured may wait until their illness reaches a critical stage before going to the hospital for admittance or emergency care. Hospitals in the U.S. provide how much of the uncompensated, or “free” health care services per year?
About $40 billion
The World Trade Organization
Was established to oversee trade agreements between its members nations
If labor productivity in the health care industry rises very slowly relative to wages and salaries in the industry, this would tend to
Increase the cost of health care
What is the most likely effect of the development of rental movies and online streaming on the movie theater (or cinema) industry?
Increased price elasticity of demand for movie theater tickets
The concept of investment in human capital indicates that
Expenditures on education can be explained in essentially the same way as expenditures on machinery and equipment
An increase in the price of tickets to a popular sporting event will increase total revenue if
The buyers of the tickets are fanatic about the event
The hypothetical nations Wat and Xat have the production possibilities for rice and corn given in the accompanying tables. Assume that Wat originally produced combination B. If the nations now fully specialize based on comparative advantage, the total gains from specialization and trade are
50 units of rice and 50 units of corn
Economists who criticize trade adjustment assistance argue that
It only benefits a small fraction of all unemployment workers
The accompanying table shows the output (either machines or wine) that each unit of input in France and Germany can produce. We see that
Germany has a comparative advantage in producing wine
One difference between monopolistic competition is that
There is some control over price in monopolistic competition
