Empirical studies that suggest differences in utilization rates between fee-for-service and managed care plans
a. are unreliable due to statistical biases.
b. conclude that financial incentives are not the reason for differences in the amount of care physician provide.
c. show no differences in health status among patient groups.
d. are unable to differentiate between the impacts due to financial incentives and those due to clinical rules.
QUESTION 2If a good is inferior and its price increases,
a. the income effect will be positive and the substitution effect will be positive.
b. the income effect will be negative and the substitution effect will be negative.
c. the income effect will be positive and the substitution effect will be negative.
d. the income effect will be negative and the substitution effect will be positive.
QUESTION 3When considering setting the transfer price at the market price of a product similar to the intermediate good that is already available on the market
a. It is appropriate to ignore that the market price includes a margin above marginal cost
b. It is OK if the product on the market includes costly features your downstream division does not use
c. Consider whether the product on the market is inexpensive because its quality is lower than you use
d. if it is similar enough, it is justification for you producing it in-house
QUESTION 4An important element in estimating the present value of an investment is the calculation of the discount factor. The discount factor may be expressed as _______ where r is the discount rate and n is the number of years the investment is held.
a. (1 + r)n
b. (1 + n)r
c. 1/(1 + r)n
d. 1/(1 + n)r
QUESTION 5If a good is normal and its price increases,
a. the income effect will be positive and the substitution effect will be positive.
b. the income effect will be negative and the substitution effect will be negative.
c. the income effect will be positive and the substitution effect will be negative.
d. the income effect will be negative and the substitution effect will be positive.
QUESTION 6When considering setting the transfer price at the market price of a product similar to the intermediate good that is already available on the market
a. It is appropriate to ignore that the market price includes a margin above marginal cost
b. Consider whether the product on the market includes costly features your downstream division does not use
c. it is OK if the product on the market is inexpensive because its quality is lower than you use
d. if it is similar enough, it is justification for you producing it in-house
QUESTION 7Input demand is called derived demand because
a. demand for an input is derived from demand for the product or service it produces.
b. demand for an input is derived from its availability in the input market.
c. demand for the output produced is also derived from consumer demand.
d. input demand actually determines how much output is produced.
QUESTION 8The lump sum principle suggests that the tax that reduces utility the least is
a. a tax on income
b. a tax on a good with many substitutes
c. an equal tax per-unit on all goods
d. a tax on a good with only a few substitutes
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