MHA 710 - Healthcare Economics - Exam 1 (Part 1 - Ch. 1 & 2)

Economics is best defined as the study of how to run a business most profitably. True or False. False Exhaust from a factory that increases health risks for people living near the factory is an example of an externality. True or False. True In 2008 and 2009, the U.S. economy experienced a deep economic downturn. If there is a short-run trade-off between inflation and unemployment, to combat the high unemployment, President Obama should have pursued an inflationary policy such as a stimulus package of reduced taxes and increased government spending. True or False. True A society faces many decisions, but a household does not. True or False. False Public policies aimed at increasing the size of the economic pie also lead to a higher degree of equality. True or False. False You can stay home and study to do well on your exam or you can go to the movies with your friends, but not both. This example illustrates: A. Scarcity and tradeoffs B. Scarcity but not tradeoffs C. Tradeoffs but not scarcity D. Neither tradeoffs nor scarcity A. Scarcity and tradeoffs Your opportunity cost of going to a Maroon 5 concert during your Spring Break is: A. Zero, because Maroon 5 is your favorite B. The price of the concert ticket C. The price of the concert ticket plus the cost of any beverages you buy at the concert D. The price of the concert ticket, plus the cost of any beverages you buy at the concert, and the value of your time D. The price of the concert ticket, plus the cost of any beverages you buy at the concert, and the value of your time