Economists John Cogan, Glenn Hubbard, and Daniel Kessler have estimated that repealing the tax preference for employer-provided health insurance would
A) increase overall spending on health care as consumers would have to pay a higher price for medical services.
B) reduce spending by people enrolled in these programs by 33 percent.
C) significantly reduce the effectiveness of the health care received by those enrolled in these programs.
D) drive up prices for health care coverage since insurance reimbursements to doctors would be reduced.
Question 2
Which of the following statements is true?
A) The supply of oil is perfectly inelastic; therefore, as the demand for oil increases over time the price of oil increases significantly.
B) The supply of oil is very inelastic over short time periods but becomes more elastic over time. A given shift in supply results in a smaller increase in the price of oil when the supply is more elastic.
C) Over short periods of time increases in the demand for oil are greater than increases in the supply of oil. Over the long run increases in the demand and the supply of oil are about equal. As a result, the price of oil increases greatly in the short run but is stable in the long run.
D) The supply of oil is very elastic over short time periods but becomes perfectly inelastic over time. A given shift in supply results in a greater increase in the price of oil when the supply of oil is perfectly inelastic.
