Question

1. The demand for physicians is unrelated to the price of medical care.
   1. True
   2. False
2. In input markets the final demand for output is more elastic than the derived demand for the inputs.
   1. True
   2. False
3. An important measure of the profitability of human capital investment
   1. Compares the sum of future benefits to the sum of investment costs
   2. The nominal rate of return
   3. The expected real rate of return
   4. Average lifetime in years
4. The most profitable medical specialty is the one with the
   1. Expected rate of return equal to that on a Treasury bill
   2. Median expected rate of return
   3. Maximum present value of net benefits
   4. Maximum present value of real net benefits
5. Physicians are perfect agents of patients because of the Hippocratic oath
   1. True
   2. False
6. Doctors’ compensation is set in a perfectly competitive market
   1. True
   2. False
7. Demands for physician services are down sloping because
   1. Physician services are standardized by the Medicare RVUs
   2. Doctors sell homogeneous products
   3. Doctors’ services reflect different bundles of attributes over which patients have different preferences
   4. Demand slopes down

1. Price discrimination—charging different consumers different pricing for the same product—requires

1. Market power
2. Identifying consumers with different demand elasticities
3. No product or service resale
4. All of the above

Answer 1

1) False. The demand for physicians is a derived input demand that depends on the price of medical care.

2) True. Input demand is stickier than demand for final product.

3) The correct option is c. The expected real rate of return

4) The correct option is d.

5) Maximum present value of real net benefits

6) False. They are perfect agents of patients because of the expertise.

7) False. Doctors are paid efficiency wages because of their specialization.

8) The correct option is d.Demand slopes downward

9) The correct option is d. All of the above