[C, 14-15]



[C, 14-15]

Suppose someone knew the probability of incurring a $10,000 medical expense was 5% and the odds of being healthy and incurring no expenses was 95%. If they used that information to compare the expected cost to them ($500) with the $600 premium it would cost to get full coverage and decided to buy the insurance then economists would say they are

a) irrational

b) risk loving

c) risk averse

d) risk neutral

[D, 14-15]

Suppose someone knew the probability of incurring a $10,000 medical expense was 5% and the odds of being healthy and incurring no expenses was 95%. If they used that information to compare the expected cost to them ($500) with the $500 premium it would cost to get full coverage and decided to buy the insurance but only if the price went no higher then economists would say they are

a) irrational

b) risk loving

c) risk averse

d) risk neutral

[B, 14-15]

Suppose someone knew the probability of incurring a $10,000 medical expense was 5% and the odds of being healthy and incurring no expenses was 95%. If they used that information to compare the expected cost to them ($500) with the $400 premium it would cost to get full coverage and decided not to buy the insurance then economists would say they are

a) irrational

b) risk loving

c) risk averse

d) risk neutral

[C, 40-41]

The Children’s Health Insurance Program is designed to

a) replace Medicaid for children

b) replace Medicaid for families with children

c) augment Medicaid by insuring the children of working (but low income) families who have no insurance

d) insure all children regardless of circumstance

[D, 40-41]

The Children’s Health Insurance Program was created in the

a) 1940s

b) 1960s

c) 1980s

d) 1990s

[B, 44-45]

Effective AIDS drugs did not exist in the early 1980s. When they became available they were very expensive. When people use these facts to say that the price of AIDS drugs has increased economists generally

a) agree

b) suggest they are confusing price increases with quality increases

c) note that the drugs are not as effective as advertised

d) stay out of this discussion

[B, 44-45]

Effective AIDS drugs did not exist in the early 1980s. When they became available they were very expensive. When people use these facts to say that the price of AIDS drugs has increased economists generally

a) agree

b) suggest that the price actually fell

c) note that the drugs are not as effective as advertised

d) stay out of this discussion

[D, 54-55]

Many economists note that the shortage of organs is, at least in part, attributable to the fact that the price of organs is

a) set by market forces

b) set too high

c) right at equilibrium

d) set at zero

[D, 54-55]

Many economists note that the shortage of blood in several rare types is, at least in part, attributable to the fact that the price of blood is

a) set by market forces

b) set too high

c) right at equilibrium

d) set at zero

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