1. What are the two major problems facing the health care system?
First, the costs of health care are high and growing rapidly. Second, many Americans are
uninsured and do not have access to health care or adequ
1. What was the importance of the Federal Trade Commission Act of 1914?
The act set up an independent government agency to investigate and to enforce
antitrust laws and the provisions of the Clayton Act. The act
1. What is energy economics and what does it have to say about energy demand and efficiency?
Energy economics studies how people deal with the fact there are relatively unlimited wants for
energy and relatively
1. What is the difference between the demand curve for a resource under pure
competition and under imperfect competition?
Under pure competition, product price is constant; therefore, the downward slope
of the D
1. The president of a toy company asks you for advice about whether the company should
cut the price of its best-selling doll this year based on the following information: last
year the company cut the price of
1. How is total government spending defined?
What is its size in the economy?
Total government spending consists of government purchases of goods and services and
transfer payments. Each has a different effect o
1. List nine characteristics of the market system.
The nine characteristics discussed in the text are: (1) private property; (2) freedom of
enterprise and choice; (3) self-interest as the major motivation for ec
1. What is meant by the economizing problem?
The economizing problem stems from two related facts. Economic wants are unlimited
because they cannot be completely satisfied with the existing limited supply of res