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
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