Two goods are substitutes when
A) an increase in the price of one reduces the demand for the other.
B) an increase in the price of one raises the demand for the other.
C) the two goods are used together.
D) the two goods have the same price.
B
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What is the motivation behind the cost-control features of managed care?
a. To ensure access to specialty care through general practitioner gatekeepers. b. To influence the way physicians practice medicine by changing the financial incentive structure of medical care delivery. c. to shift the financial risk onto patients. d. to eliminate all the guesswork from diagnoses by establishing practice guidelines. e. to create competition by providing patients with a wide range of providers.
Game theory is used in a number of areas in economics. What is the primary reason that it is used in analyzing oligopoly type market structures?
a. The firms are producing a similar product b. The firms are producing differentiated products c. The demand curve facing the oligopolistic firms is perfectly inelastic d. The mutual interdependence of firms in industries with a small number of firms e. The demand curve the oligopolistic firm faces is downward sloping