Introduction to Healthcare Economics

What is the primary focus of economics?

• The study of market trends

• The study of government policies

• The study of choices made when resources are limited

• The study of wealth distribution

What does the Law of Supply state?

• As price increases, demand decreases

• As price increases, supply increases

• As price increases, supply decreases

• As price decreases, demand increases

What is Market Equilibrium?

• When supply exceeds demand

• When prices are fixed by the government

• When demand exceeds supply

• When the market price is established through competition

What does the Principle of Opportunity Cost refer to?

• The cost of producing goods

• The cost of an alternative that must be forgone

• The cost of variable expenses

• The cost of fixed expenses

What is the definition of Utility in economics?

• The amount of goods produced

• The total revenue generated

• The capacity of a commodity to satisfy human wants

• The total cost of production

What does the Marginal Principle suggest?

• Maintain activity regardless of costs

• Increase activity if marginal cost exceeds marginal benefit

• Reduce activity if marginal benefit exceeds marginal cost

• Increase activity if marginal benefit exceeds marginal cost

What is the Break-even Point?

• The point where profit is maximized

• The point where fixed costs are covered

• The point where costs exceed revenue

• The point where total revenue equals total cost

What does the Spillover Principle describe?

• The side effects arising from transactions

• The benefits of competition

• The costs of production

• The benefits confined to transaction parties

What is Economic Efficiency?

• Minimizing waste

• Maximizing production

• Minimizing costs

• Maximizing the value of resources

What is the effect of Competition in a market?

• It encourages innovation and drives down prices

• It leads to less innovation

• It creates monopolies

• It drives prices up