Chapter 1 & 2 MC questions with answers

1. Opportunity cost is a measure of a. foregone opportunities. b. value based on the alternative not chosen. c. value in terms of the cost of production. d. the difference between production cost and resource cost. e. both a and b. 2. The opportunity cost of investing in a new lithotripter (a machine that pulverizes kidney stones with sound waves) is a. defined by the dollar cost of the equipment. b. the same for every health care provider. c. measured by the difference between the expected revenues from selling the services of the lithotripter and the invoice cost of the machine. d. defined by the next best use of the money invested in the equipment. e. impossible to calculate. 3. The “invisible hand” using Adam Smith’s terminology refers to a. government control of the market. b. market forces working through the price mechanism. c. the money supply that serves to keep the economy working smoothly. d. the role of innovation in maintaining a steady rate of growth. e. “behind-the-scenes” policy making to influence how markets allocate scarce resources. 4. According to recent public opinion polls, what percentage of Americans are satisfied with the quality of the medical care they receive? a. 15 percent. b. 40 percent. c. 65 percent. d. 75 percent. e. 90 percent. 5. Charging higher prices for one category of patients in order to provide free or subsidized care to another group is called a. price discrimination. b. cost-shi