HSA 3150 Chapter 2: Chapter 2 pt 2

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lavenderpig501

25 Sep 2018

School

FGCU

Department

Health Services Administra

Course

HSA 3150

Professor

Kahar

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Document Summary

The most fundamental difference is that buyers or demanders in economic markets express their preferences by spending their own money. In policy markets, suppliers and demanders stand to benefits and incur costs because of the authoritative decisions called policies. In commercial markets, demanders seek public policies that satisfy their them. In policy markets, demanders seek public policies that satisfy their preferences. The most effective demanders of policies, however, are well-organized interest groups. Interest groups arise in democratic societies because the opportunities to achieve particular outcomes are enhanced through collective action in the policy market, specifically through influencing the public policymaking process. Those who hold the power elitist perspective challenge those who hold the pluralist perspective by pointing to the highly concentrated and interlocked power centers in. Members of each branch of government supply policies in the political market, although each branch plays its role differently.

Related Questions

1. According to a WSJ article, in Britain, drug companies are paying for nurses to study patient charts to identify people with chronic illnesses. "The nurses then recommend which patients should be called in for a check-up and perhaps prescribe new treatment. The work is part of what the industry calls "disease management programs," which the companies say improve care for people with illnesses like diabetes, asthma, or heart disease." Source: Jeanne Whalen, "Drug Makers Finance Nurses for U.K. Doctors." Wall Street Journal, 30 May 2007, Page B1. Which of the following best explains the actions of the drug companies? Select one:

a. Drug companies see this program as a way of educating patients about the various drug choices available to them

b. The companies see this program as a way to market their own products

c. The companies are committed to improving patient care in Britain

d. The companies are doing their part to ease the health care crisis in Britain

2. According to the economic way of thinking, Select one:

a. The value of a good is determined by the cost of the resources used to produce that good

b. A nation's wealth can be increased by shifting the production possibilities frontier inward.

c. Innovation makes it possible to produce good without giving up the production of another good

d. Costs are incurred when scarce resources are used to produce goods.

3. All of the statements are true about markets except Select one:

a. Markets excel at wealth creation because they often provide incentives for self-interested individuals to take socially beneficial actions

b. Markets function even without an administrator to coordinate the consumption and production plans of buyers and suppliers, respectively

c. The most equitable way to distribute goods and services is through markets

d. Markets are generally an efficient way to facilitate the exchange of goods, services, and resources

4. An institutional arrangement that provides people with opportunities and procedures for exchanging goods, services, and resources is called: Select one:

a. Barter

b. A social economy

c. Traded.

d. A market

5. Concerned that California's high-occupancy vehicle (HOV) lanes were not operating at full capacity and therefore not easing congestion as much as they could. In 2006, California lawmakers authorized the state's Department of Motor Vehicles to distribute 85,000 stickers to owners of gasoline-electric hybrid cars. Which of the following are the consequences of this policy?

(i) The stickers increased the demand for hybrid vehicles that qualified for stickers. (ii) The price of hybrid vehicles increased. (iii) The HOV lanes became clogged with hybrid vehicles which further aggravated congestion. Select one:

a. (i) and (ii) only b. (i), (ii) and (iii) c. (ii) and (iii) only d. (i) only

6. Consider the following policy: To make sure that poor people receive emergency treatment, the U.S. government forces emergency rooms to offer free care to poor patients. Which of the following is a consequence of this policy? Select one:

a. Hospitals in poor neighborhoods are likely to close their emergency rooms because of the high cost of providing free treatment to poor patients

b. Hospitals will have to offer higher salaries to doctors and nurses to induce them to work in poor neighborhoods

c. More hospitals are likely to open emergency care facilities in poor neighborhoods because of increased demand

d. The wait time in emergency rooms will fall.

7. Consider the following three statements: (i) The slump in the housing market has led to an increase in unemployment in the housing construction market. (ii) The Federal Reserve decided to keep interest rates unchanged, motivated by the slump in the housing market. (iii) The California Air Resources Board passed a regulation requiring that 10% of all large automobiles sold in California from 2008 onward be zero-emissions vehicles: cars powered by electricity or alternative fuels like hydrogen. Which of the statements is a macroeconomics issue? Select one:

a. (ii) only b. (i), (ii) and (iii) c. (i) and (ii) only d. (ii) and (iii) only

8. Consider the following three statements: (i) The slump in the housing market has led to an increase in unemployment in the housing construction market. (ii) The Federal Reserve decided to keep interest rates unchanged, motivated by the slump in the housing market. (iii) The California Air Resources Board passed a regulation requiring that 10% of all large automobiles sold in California from 2008 onward be zero-emissions vehicles: cars powered by electricity or alternative fuels like hydrogen. Which of the statements is largely a microeconomics issue? Select one:

a. (i) and (iii) only b. None of the above statements is a microeconomics issue c. (iii) only d. (i) only

9. Consider the following two medical procedures for a particular chronic illness. Procedure X has a very high patient survival rate, but patients are likely to suffer significant brain damage that greatly diminishes one's quality of life. Procedure Y has a much lower survival rate, but if a patient survives she is able to lead a full and normal life. If surgeons are compensated only if their patients survive, how will this policy affect the treatment for this illness?

Select one:

a. More of procedure X will be performed although patients are likely to suffer significant brain damage

b. Surgeons have no incentive to treat this illness

c. More of procedure Y will be performed because patients will able to lead full and normal lives

d. Patients have no incentive to seek treatment for this illness

10. Daikin, Possner, and Zoe are discussing what it means to say that people respond to incentives. Here is an extract from their conversation. Daikin: It means that people are required to behave in a cooperative fashion so that the citizens of a nation can coexist peacefully. Possner: It means that people act in ways that society approves. No rational person will do business with immoral characters. Zoe: It means that people undertake certain actions if they know that doing so will result in some form of material reward that they will not otherwise receive. Whose view accords with the economic way of thinking? Select one:

a. Only the views of Daikin and Zoe exhibit the economic way of thinking.

b. Possner's view is the only one that exhibits the economic way of thinking.

c. All three of their views exhibit an economic way of thinking.

d. Zoe's view is the only one that exhibits the economic way of thinking.

whitespider552

Question 3

We saw in class that the same good can fall in different categories (public/private/club/common resource) depending on circumstances. An example of such a good would be watching a movie at the theater. If a lot of people want to watch it, the movie is a _________. If very few people want to watch it (to the point where a room could not even be filled), the movie is likely to be a _______.

A. a common resource; a public good

B. a public good; a common resource

C. a private good; a club good

D. a club good; a private good

3 points

Question 4

Which of the following statements about the free-rider problem is not true?

A. Individuals have an incentive to free-ride when the good is not excludable.

B. The kinds of goods for which the free rider problem arises are common resources and public good.

C. Markets for goods for which there is a free-rider problem are inefficient because not enough of the good is produced.

D. Goods for which the free-rider problem exists tend to be over provided relative to what would be optimal.

4 points

Question 5

To achieve the efficient provision of public goods, the

A. market should be allowed to operate without government intervention.

B. government must limit the provision of those goods.

C. government must tax producers of those goods.

D. government must either provide those goods or subsidize their production.

3 points

Question 6

Which of the following statements about public goods is not true?

A. Because people cannot be excluded from their consumption and thus have no incentive to pay for them, public goods are underprovided by the market.

B. Efficiency requires that the government provide or fund (subsidize) the provision of all public goods.

C. Efficiency requires that the government provide or fund only the public goods that create more benefits than costs to society.

D. In reality, it is hard to provide public goods efficiently.

3 points

Question 7

Public goods must be provided by the government as the market on its own will fail to provide them. However, even with government provision it is very hard to achieve efficiency. Why?

A. In reality, it is very hard (if not impossible) to accurately estimate the benefits of providing a public good.

B. A. In reality, there can be overruns in the cost of providing the public good.

C. Government decisions about which public goods to provide can be influenced by lobbying by interest groups.

D. All of the above are true.

4 points

Question 8

Which of the following is not a common resource?

A. congested roads

B. clean water

C. wild life, which hunters want to hunt and others want to view.

D. a fireworks display.

3 points

Question 9

Many species of animals must be protected by law to keep them from extinction. Why are cows not one of these endangered species even though there is such a high demand for beef?

A. Cows reproduce at a high rate and have adapted well to their environment.

B. Public policies protect cows from predators and diseases.

C. Cows are privately owned (private goods), whereas many endangered species are owned by no one (common resources).

D.There is a natural ecological balance between the birth rate of cows and human consumption.

3 points

Question 10

Which of the following statements about common resources is not true?

A. Due to the free-rider problem, common resources tend to be overused.

B. Because there is rivalry in the consumption of common resources, whenever one person uses a common resource it is imposing a negative externality on others who might also want to use it.

C. There are no private solutions to the management of common resources.

D. One of the solutions that ensures that common resources are properly managed is their privatization.

3 points

Question 11

In our analysis of the firmâs behavior and goals, when we talk about cost, we include _________, and when we talk about profit, we mean ________.

A. Explicit costs only; economic profit

B. Implicit costs only; economic profit

C. Implicit costs only; accounting profit

D. Explicit + implicit costs; economic profit

E. Explicit + implicit costs; accounting profit

3 points

Question 12

One of the differences between explicit and implicit costs is that

A. explicit costs must be greater than implicit costs.

B. explicit costs do not require a direct monetary outlay, whereas implicit costs do.

C. implicit costs do not require a direct monetary outlay, whereas explicit costs do.

D. implicit costs must be greater than explicit costs.

3 points

Question 13

Which of the following is FALSE:

A. If accounting profit is zero, then economic profit is negative

B. Economic profit takes cost the opportunity cost of time and capital into account

C. Economic Profit = Accounting Profit + Implicit Cost

D. Economic Profit = Accounting Profit â Implicit Cost

3 points

Question 14

Which of the following is an example of an implicit cost?

(i) the owner of a firm forgoing an opportunity to earn a large salary working in Wall Street

(ii) interest paid on the firm's debt

(iii) rent paid by the firm to lease office space

A. (ii) and (iii) only

B. (i) and (iii) only

C. (i) only

D. (iii) only

3 points

sapphirekangaroo316

Let's change it up a little. You may have to dig a little for this one. Fannie Mae and Freddie Mac are two banking giants that have been in news because of their role in the 2008 financial crisis. Due to this many in the government believe that the two companies should be put out of business. On the other hand, there are many who believe the companies should remain as they are. See The Case For Keeping Fannie and Freddie Alive. The argument both ways is in a sales pitch for the two contrary opinions. how would you convince someone either way on the issue of Fannie and Freddie? A reference is required to support your post

On just one major piece of economic policy, President Obama and House Republicans share the same basic opinion: kill off government-backed mortgage giants Fannie Mae and Freddie Mac.

This rare bit of consensus might also prove to be a devastating mistake.

Fannie and Freddie which guarantee mortgages were placed under federal conservatorship in 2008 as the housing bust reached its apex. The firms are roughly within $42 billion of repaying the $187.5 billion they received from taxpayers, but Obama and much of Congress plan to wind them down in the belief that another federal bailout will never again be necessary.

We can't leave taxpayers on the hook for irresponsibility or bad decisions by some of these lenders or Fannie Mae or Freddie Mac, Obama said in a speech this month. We've got to encourage the pursuit of profit, but the era of expecting a bailout after you pursue your profit and you don't manage your risk well, that puts the whole country at risk. And we're ending those days. We're not going to do that anymore.

But the political debate has been lopsided thus far focused on putting Fannie and Freddie into the grave, while largely ignoring what their demise could mean for homebuyers and the economy a sharp jump in interest rates, and a drop in the availability of mortgages.

Senate Majority Leader Harry Reid (D-NV) has objected to plans to end both companies.

These are the government organizations that have made homeownership so easy, Reid recently told Nevada Public Radio. I don't agree with the president. He says he wants to get rid of them. I'm going to look closely at his recommendations because on their face, I don't like them.

Mostly, economists and investors are framing the issue in the same way as Reid.

It boils down to a tradeoff between shifting risk away from the government and taxpayers, versus keeping mortgages inexpensive and widely available, said Jed Kolko, the chief economist at the real estate firm Trulia. When push comes to shove, it's hard to do both.

Their executives received outlandish bonuses during the boom, only to foist the eventual losses caused by years of mismanagement onto the public. It rightfully enables sucker punches from Capitol Hill that voters approve of, even though the rescue kept the entire housing sector alive. Of the $1.75 trillion worth of mortgages originated last year, about 90 percent were made through the federal government.

This point matters because Fannie and Freddie ensure that the housing market does not seize up during a recession, said Ken Fears, an economist for the National Association of Realtors. Even if more private capital is needed in the mortgage industry, having the government participation creates liquidity that keeps the entire sector operating during tough economic times, Fears said.

Lawmakers tend to assume that the markets can transition over five or 10 years to a mortgage industry with a modest government backstop, or no taxpayer support at all. Before retiring at the end of May as a managing director for bond investor PIMCO, Scott Simon said that this amounted to a fantasy.

The private market can make mortgages, but they would trade at much higher yields and the down payments would be much higher because the private market cannot make competitive, fixed-rate mortgages with 20% or less of a down payment on the loans, Simon told National Mortgage News. Most of the people who think we should shut [the GSEs] down have a pure philosophical belief and they don't care what the outcome is. Or they simply don't understand anything about how housing finance works.

Fannie and Freddie help the economy with their guarantees, Simon reasoned but exposed taxpayers to their risks by having their own investment portfolios.

As of now, all profits from both companies go to the Treasury Department, per changes made last year to the terms of the conservatorship. In the original terms, Treasury received a 10 percent dividend from Fannie and Freddie. But Fannie and Freddie are now required to fork over all of their earnings forever to Treasury, a windfall that suddenly reduced the budget deficit.

A group of investors led by the hedge fund Perry Capital challenged this arrangement in a U.S. District Court lawsuit filed last month, claiming that they deserve a share of the proceeds after taxpayers have been repaid.

Because Fannie and Freddie are now generating cash, it would in theory be possible for the government to use these profits to create a capital cushion that prevents the need for a future taxpayer bailout.

By keeping the two companies under government control, taxpayers would benefit from the sale of about $200 billion worth of equity, investors in Fannie, Freddie, and other real estate assets explained in the background. The profits would be enough to create a capital cushion to insulate against a future downturn, without having to seek capital in the private market that could push mortgage interest rates higher.

But this requires Obama and GOP lawmakers to save Fannie and Freddie, precisely what they have vowed not to do. Obama wants a government insurance fund to replace them, while Republican congressmen favor an end to any Washington involvement with guarantees.

House Financial Services Committee Chairman Jeb Hensarling (R-TX) would eliminate almost all federal involvement in the mortgage market. His policy assumes that the rusty tin standard of 30-year, fixed-rate mortgages would soon fade away, as more homebuyers would settle for variable-rate mortgages. Interest rates on a 30-year, fixed mortgage currently average 4.4 percent, a figure that could instead swing violently over time depending on inflation and the Federal Reserve. When the Fed attempted to tamp down inflation between 1980 and 1982, rates soared above 16 percent with the government backstop in place.

Obama would like to preserve the 30-year, fixed-rate mortgage. He has endorsed adopting a more limited government backstop as outlined in a bipartisan Senate bill co-sponsored by Tennessee Republican Bob Corker and Virginia Democrat Mark Warner.

The Corker-Warner bill would also unwind Fannie and Freddie, bringing their dominance to an end. In their place would be private financial institutions that would pay into a government insurance fund. Mark Zandi, the chief economist for Moody's Analytics, estimated that the plan would cause mortgage rates to increase by as much as 1.25 percent in the near-term. This estimate assumes a 20 percent down payment and a credit score of 750, slightly above the current U.S. average.

But of course, lawmakers have not discussed the potential tradeoffs in the early stages of mortgage reform. Unless voters have a clearer picture of the consequences, some say it could produce the same kind of boondoggle caused by Obamacare in 2010.

I don't think there has been much of a sales job to the public on what a new mortgage finance system looks like, said Brian Gardner, senior vice president of Washington research at the investment bank Keefe, Bruyette & Woods. I don't think you shove this down the throat of the electorate, as we saw with the health care overhaul.

apricotgiraffe451

HSA 3150 Chapter 2: Chapter 2 pt 2

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