Reference no: EM132346342

1. When does an increase in price produce a substitution effect?

• only if there is a real-income
• effect
• always
• only if purchasing power is impacted significantly
• only if marginal utility per dollar increases relative to another good
• only if marginal utility per dollar decreases relative to another good

2. The ________ line, and the area underneath, contain all of the possible combinations that a consumer can afford.

• redaction
• optimization
• indifference
• budget constraint
• Maginot

3. On an annual basis, healthcare expenditures in the United States are approximately

• $3 trillion.
• $1 trillion.
• $100 billion.
• $500 billion.
• $750 billion.

4.What is one cited reason why healthcare expenditures are so high in the United States?

• Medicare and Medicaid reduce the supply of medical care.
• Insurance companies attempt to control medical care costs by capping expenditures.
• Doctors know patients are likely covered by insurance, which reduces the demand for medical care.
• Doctors know patients are likely covered by insurance and provide unnecessary services and treatments.
• Patients covered by insurance consume too little health care.