test 1

Question 1

scarcity

Answer 1

unlimited wants, but limited resources

Question 2

3 factors for producing healthcare

Answer 2

labor, capital, and natural resources

Question 3

labor

Answer 3

amount of workers

Question 4

capital

Answer 4

products made by humans (machinery, tools, equipment)

Question 5

natural resources

Answer 5

not made by environment (wood, water, oil)

Question 6

2 types of funding

Answer 6

• for profit: like a business
• for subsidies: like a public good

Question 7

what is demand

Answer 7

a certain amount (QD) for a good/service, which buyers are willing and able to buy at various possible prices, ceteris paribus (only Qd + P are considered)

Question 8

what is supply

Answer 8

particular quantity supplied for a good/service, which suppliers are willing and able to sell at various prices, ceteris paribus

Question 9

Law of Demand

Answer 9

If P ↑ then Qd ↓
If P ↓ then Qd ↑

Question 10

Law of Supply

Answer 10

If P ↑ then Qs ↑
If P ↓ then Qs ↓

Question 11

equilibrium

Answer 11

price at which Qd = Qs

Question 12

surplus

Answer 12

good/service = overcharged
ex: clothes on sale
- surplus = Qs-Qd

Question 13

shortage

Answer 13

good/service = not accessible
- shortage = Qd - Qs

Question 14

Canadian healthcare system quirks

Answer 14

• subsidized, so funded by tax dollers and few out of pocket costs
• supply of healthcare professionals is stable (fixed) over relatively long time periods

Question 15

what is a change in Qd (caused by + causes)

Answer 15

• caused by a change in the price of good we are considering
• causes a movement along original D curve from one P and Qd pairing to a new P and Qd pairing

Question 16

what is a change in D

Answer 16

• caused by a change in any non-price factor which could potentially affect the prices and quantities in the market
• causes a shift in the demand curve from the original demand curve to an entirely new demand curve

Question 17

change in Qs

Answer 17

• caused by a change in the price of the good we are considering
• causes a movement along the original S curve from one P and Qs pairing to a new P and Qs pairing

Question 18

change in S

Answer 18

• caused by a change in any non-price factor which would potentially affect the prices and quantities in the market
• causes a shift in the supply curve from the original S curve to an entirely new S curve

Question 19

factors causing demand to shift

Answer 19

• income
• tastes/preferences
• expectations of future price changes
• price of complementary goods
• price of substitute goods
• population

Question 20

income for normal goods

Answer 20

if I + then D +
if I - then D -

Question 21

income for inferior goods

Answer 21

if I +, then D -
if I -, then D +

Question 22

tastes/preferences (popularity)

Answer 22

If pop +, then D +
if pop -, then D -

Question 23

price of substitute goods

Answer 23

if P sub +, then D orig +
if P sub - , then D orig -

Question 24

price of complementary goods

Answer 24

if P comp +, then D orig -
if P comp -, then D orig +

Question 25

expectations of future price changes

Answer 25

if expect P + in future, then D + for now if expect P - in future then D - for now

Question 26

Population

Answer 26

if pop +, then D + if pop - , then D -

Question 27

factors causing S to shift

Answer 27

- productivity - production costs - number of sellers -expectations of future price changes - taxes - subsidies

Question 28

what are subsidies

Answer 28

money given by government to a business/institution to help increase production

Question 29

Production costs (C)

Answer 29

if C +, then S - if C -, then S +

Question 30

Productivity (supply)

Answer 30

if prod +, then S + if prod -, then S -

Question 31

Taxes

Answer 31

if T +, then S - if T -, then S +

Question 32

subsidies (supply)

Answer 32

if subs +, then S + if subs -, then S -

Question 33

advantage of subsidies in the healthcare sector

Answer 33

able to provide more top quality care

Question 34

expectation of future price changes

Answer 34

if expect P + in future, then S - for now if expect P - in future, then S + for now

Question 35

number of sellers in a competitive market

Answer 35

if #sellers + ,then S + if #sellers -, then S -

Question 36

what happens in non competitive market

Answer 36

the number of sellers does not change

Question 37

responsiveness

Answer 37

how responsive is a change in Qd of a good given a change of P

Question 37

how to calculate EP

Answer 37

%change QD/ % change P

Question 38

perfectly inelastic

Answer 38

Ep= 0 - percentage change in QD= 0 regardless percentage change in P

Question 39

relatively inelastic demand

Answer 39

0 < Ep < 1 - %change Qd < %change P

Question 40

unit elastic

Answer 40

Ep = 1 - % change Qd = % change P

Question 41

relatively elastic demand

Answer 41

1 < EP < ∞ - % change Qd > $ change P

Question 42

perfectly elastic

Answer 42

Ep ≈ ∞ - % change P ≈ 0 regardless of % change Qd

Question 43

Production possibilities Curve (PPC)

Answer 43

a model that shows all maximum production output combinations for 2 goods in an economy, ceteris paribus

Question 44

3 assumptions of PPC

Answer 44

1) all resources are used fully, w/o waste 2) production that takes place in a given, fixed time period 3) resource levels (NR, L,K) and productivity levels are fixed in the fixed time period

Question 45

what does point S mean in ppc graph

Answer 45

inside the ppc line, so not productively efficient because they fail to use all resources or/and there is waste

Question 46

what does point R mean in graph

Answer 46

outside the ppc line, so no productively efficient because they're currently impossible to produce bc of fixed resources and productivity in fixed time period