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1. During which time period did was the inflation of medical-care
prices in the U.S. the greatest?
a. 1955 to 1965
b. 1965 to 1975
c. 1975 to 1985
d. 1985 to 1995
2. Explain the factors that contributed to the high inflation rate of the medical consumer price index in the years following 1974?
3. Which of the following would cause a production possibilities frontier
to shift outward?
a. an increase in the price of one of the goods.
b. a decrease in the price of one of the goods.
c. an increase in the marginal utility of one of the goods relative to that of the other good.
d. an increase in the amount of labor available.
4. A clinic finds that it has enough money in its budget to hire either
a nurse or a lab technician. Currently it has four nurses and two
lab technicians. The total production attributed to nurses is 32
patients per day, while the total production attributed to the lab technicians
is 12 patients per day. The marginal product of an extra nurse would
be 4 patients per day, while the marginal product of an extra lab technician
would be 5 patients per day. The clinic should hire
a. an additional nurse, because their average product is higher.
b. an additional nurse, because their marginal product is higher.
c. an additional lab technician, because their average product is higher.
d. an additional lab technician, because their marginal product is higher.
Also look at p. 17, questions 4 and 5.
last updated February 11, 2002, by Jim Frederick
copyright 2002 Jim Frederick