If you are unable to answer the full question partial answers are accepted. I have attached images of the graphs, but if for some reason they do now show all the multiple choice do not require the graphs or tables.
1. What does scarcity result in?
a. Consumers must balance competing objectives when choosing how to allocate their resources.
b. Scarce resources result in an unsustainable market, which eventually collapses.
c. Given limited resources, it is not possible to produce unlimited output.
d. If there is no demand for a good, the good is produced in excess.
2. What is an economic market?
a. A place where consumers buy goods from every producer at a fixed price.
b. A place where people who demand and supply specific goods come together.
c. A place that requires perfect competition and rules out market failures
d. A place that requires a system of property rights to ensure people can participate in good faith
3. What is efficiency?
a. A term concerning the maximization of benefits/outputs given specific inputs or the minimization of costs for a given level of output.
b. A term that indicates the maximum output possible which all consumers share equally.
c. A term which explains why the inflation in healthcare is rising faster than in other economic sectors, and why drug costs are relatively high.
d. A term defining the cumulative level of output by a firm
4. Which of the following is true for a good with price inelastic demand?
a. When price increases, quantity demanded decreases by a smaller percentage than the price increase
b. When price increases, quantity demanded decreases by a higher percentage than the price increase
c. It has fewer close substitutes relative to other goods, making switching less likely
5. What is consumer surplus?
a) A condition that requires the cost of goods to be higher than in other countries.
b) The difference between what a consumer pays for a good and how much they would have been willing to pay for it.
c) The total value of all goods that a consumer purchases within a given timeframe.
6. Returns to scale
a) Measures the addition to output as one factor to production is increased
b) Vary directly with the level of output
c) Measure the addition to output as the scale of operations increases in the long run so that all inputs can be varied
7. Economies of scale
a) Result in a change in prices as the supplier produce more than quantity demanded
b) Describe the conditions under which long-run average cost decreases as output increases
c) Are present when marginal cost is lower than average cost and the average cost is falling
8. Market failures can be described as
a) Always resulting in monopoly
b) Only possible to address through regulation
c) A situation In which the market does not result in an efficient allocation of resource
9. What is the link between efficient production and the production possibilities frontier?
a) The production possibilities frontier shows the various combinations of goods that are feasible to be produced efficiently.
b) Efficiency makes the production possibilities frontier irrelevant.
c) Inefficient or infeasible combinations of outputs do not lie on the production possibilities frontier.
10. In economic evaluations
a) The measurement or valuation of costs in both alternatives are always expressed in monetary units, regardless of type of economic evaluation
b) The measurement or valuation of consequences are always expressed in monetary units regardless of type of economic evaluation
c) There are two key features: they are comparative analyses and it compares these options in terms of theirs costs and their consequences.
1. Briefly describe the reasons why markets are a useful resource allocation mechanism.
2. In what ways is the supply of health services in practice more complicated than the basic model of supply?
3. Provide an example of positive externalities and one of negative externalities in the context of health care. Describe what aspects of your cited examples make them suitable to be positive/negative externalities.
4. Describe briefly the principal-agent relationship in the context of health care ?
5. Briefly describe the stages of economic evaluation. describe which stages may pose more challenges in the context of economic evaluation in a health care setting
Short problems & Graphs
On the chart to the right, indicate which curves refer to Supply and Demand functions of a normal good. Name these curves S1, S2, D1, and D2, respectively (ordering is up to you, but make sure to correctly indicate which ones are for demand and which for supply).
Read all other questions before starting to answer them.
a) Choose an initial market equilibrium (any of points A through D) and show the price and quantity it reflects. Consider questions b) and c) in your selection of the initial equilibrium.
b) Show visually and describe how market equilibrium changes due to a decrease in consumers' real income which decreases demand. Use points A, B, C or D to describe a new equilibrium.
c) After answering b), show visually and describe how market equilibrium changes due to very favorable weather which here, we will assume it increases supply of the good. Use points A, B, C or D to describe a new equilibrium.
2. Draw a graph of marginal and total utility for eating salads using the information from the table below.
a) What is the relationship between marginal and total utility?
b) What would negative marginal utility mean?
Short response .
1. Briefly describe each of the payment models to pay health professionals (fee-for-service, capitation, salary, performance-based payment). In your words, describe which model(s) may be more suitable if there are concerns of supplier-induced demand.
2. Imagine that you are tasked to provide information via economic analysis to support the decision-making of a government seeking to decide whether to invest further resources into the research and treatment of a rare condition, or to build new schools. Describe what type of economic analysis is best suited for this and why. Please also include a description of the advantages and limitations of the most suitable economic analyses you selected.
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