Test Bank for economics of health and medical care 7th edition

Test Bank for Economics of Health and Medical Care 7th edition

Chapter 4

Multiple Choice

1. In the demand model, the endogenous variable is:

A) Income

B) Price

C) Tastes and preferences

D) Prices of other related goods and services

Ans: B

Complexity:

Ahead:

Subject: Chapter 4

2. Measures of ability to purchase healthcare services include:

A) An individual’s earnings in a specific time period

B) An individual’s level of wealth

C) An individual’s after-tax income

D) A and C only

E) A, B, and C

Ans: E

Complexity:

Ahead:

Subject: Chapter 4

3. The change in total utility resulting from a unit change in the consumption of a good or services is called

A) Absolute utility

B) Diminishing marginal utility

C) Marginal utility

D) None of the above

Ans: C

Complexity:

Ahead:

Subject: Chapter 4

4. If the price of a physician visit is $75, and individual A’s own demand for visits is 10 visits, individual B’s own demand for visits is 12 visits, individual A demands 4 visits for individual B, and individual C demands 2 visits for Individual A, what is the social demand for physician visits?

A) 28 visits

B) 26 visits

C) 22 visits

D) 20 visits

Ans: A

Complexity:

Ahead:

Subject: Chapter 4

5. Assume that Dr. X charges $30 for a test and that last week he performed 120 tests. This week, he raised his charges to $32.50 for that test and only provided 110 tests. What is the approximate arc price elasticity of demand?

A) -3.7

B) -0.9

C) -1.4

D) -1.1

Ans: D

Complexity:

Ahead:

Subject: Chapter 4

True/False

1. A model is a complete description of reality.

Ans: False

Complexity:

Ahead:

Subject: Chapter 4

2. The present value of a benefit of $10,000 that occurred in 4 years, discounted at a rate of 8% would be $6,800.

Ans: False

Complexity:

Ahead:

Subject: Chapter 4

3. An outward shift in demand is called an increase in demanD)

Ans: True

Complexity:

Ahead:

Subject: Chapter 4

4. A complementary good or service is one whose use is generally accompanied by the use of the good or service in question

Ans: True

Complexity:

Ahead:

Subject: Chapter 4