TEST BANK for Health Policy Issues: An Economic Perspective, 7th Edition by Paul Feldstein

1. ch12-001 Why is there excess demand for medical schools? a. Medical schools can’t expand their spaces fast enough to accommodate the increased demand. *b. Medical schools have no incentive to expand their spaces even though demand exceeds the number of spaces. c. No excess demand for medical schools exists. Students apply to multiple medical schools, so the net demand for spaces equals the number of spaces available. d. It takes many years and a great deal of money to expand medical school capacity, and medical schools must raise the funds to do so. If the schools received more donations, they would expand their number of spaces. 2. ch12-002 If the market for medical education were like other markets, what role would tuition play? a. Increased tuition would serve to ration student demand for the existing number of spaces. b. Increased tuition would provide funds to pay higher salaries to the administrative staff. c. Increased tuition would provide medical schools a financial incentive (and the funds) to invest in facilities and faculty so that they could accommodate larger enrollments. *d. A and C 3. ch12-003 If medical education were like other markets, would lowincome students be able to become physicians? a. No, they couldn’t afford the high tuition. *b. Yes, they would be eligible for scholarship and loan programs. c. Yes, they could go to medical schools overseas. d. No, medical schools would want students whose parents could make large donations for their children to be admitted.