Refer to Figure 7-6. Answer the following questions:
1. What would be the equilibrium price and quantity if consumers had to pay the full price of medical services?
2. With insurance acting as a third-party payer, what price will consumers pay for medical service?
3. With insurance acting as a third-party payer, what price will doctors receive for medical service?
4. With insurance acting as a third-party payer, what will be the equilibrium quantity of medical services?
5. With insurance acting as a third-party payer, what will be the value of the deadweight loss?
1. $50; 400
2. $25
3. $70
4. 600
5. $4,500
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The benefits received principle suggests that: a. traditional exemptions should be removed since they benefit people with ability to pay more taxes. b. people with different levels of income should be treated in the same manner
c. individuals receiving the benefits should be those who pay for them. d. those with the greatest ability to pay taxes should pay more than those with the least ability to pay taxes.
Suppose that the reserve ratio is 6%, and applies only to checkable deposits. A bank has non-checkable time deposits of $300 million, checkable deposits of $100 million, and reserves of $8 million. What are the excess reserves of this bank?
A. $5.6 million B. $6 million C. $2 million D. $2.4 million