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|National Medical Enterprises, Inc., a $4 billion operator of hospitals and psychiatric treatment centers, faced criminal probes for practices such as widespread overbilling and fraudulent diagnoses to extend patients’ hospital stays. Investigators found that NME’s top management urged hospital administrators to adopt “intake” goals designed to lure patients into hospitals for lengthy and unnecessary treatments. Hospital staffers were also urged to admit fully half of all patients who came in for an evaluation. Suppose a hospital staffer at NME refused to admit patients for whom she felt treatment was unnecessary. Could her refusal be considered insubordination? If the same staffer considered exposing fraudulent diagnoses to an outside agency, what whistle-blowing precautions would she be wise to consider before going public with her case?|
|a. From this table, what is the total amount of trade within Europe? What percentage is this of total world trade?
b. What is the total amount of trade (in either direction) between Europe and North America? Add that to the total trade within Europe, and calculate the percentage of this to the world total.
c. What is the total amount of trade within the Americas (i.e., between North America, Central America, South America, and within each of these regions)? What percentage of total world trade is this?
d. What is the total value of exports from Europe and the Americas, and what percentage of the world total is this?
e. What is the total value of exports from Asia, and what percentage of the world total is this?
f. What is the total value of exports from the Middle East and the Commonwealth of Independent States,13 and what percentage of the world total is this?
g. What is the total value of exports from Africa, and what percentage of the world total is this?
h. How do your answers to (b) through (h) compare with the shares of worldwide trade shown in Table 1-1?
|In 1999 Royal Philips Electronics paid $180 million to buy 20-year naming rights of the Atlanta, Georgia, stadium, home of NBA’s Atlanta Hawks. University of Massachusetts Professor Timothy D. DeSchriver and Drexel University Professor Paul E. Jensen analyzed naming rights. In their study, what was the likely impact of each of the following on a corporation’s willingness to pay to name a stadium? (Difficult)
a. An existing team is relocating to the stadium.
b. The stadium is in a highly populated area.
c. The stadium’s current name is the Staples Center and has had that name for 20 years.
|Grade inflation is widespread. In 1990, 81 percent of the students who took the SATs had an A or B average, but 40 percent of them scored less than 390 on the verbal SAT. Students’ grades are increasing but what they are learning is decreasing. Some economists argue that grade inflation should be dealt with in the same way that price inflation should be dealt with—by creating a fixed standard and requiring all grades to be specified relative to that standard. One way to accomplish this is to index the grades professors give: specify on the grade report both the student’s grade and the class average, and deflate (or inflate) the grade to some common standard. Discuss the advantages and disadvantages of such a proposal.|
|If the demand curve for wheat in the United States is
P = 12.4 = QD
where P is the farm price of wheat (in dollars per bushel) and QD is the quantity of wheat demanded (in billions of bushels), and the supply curve for wheat in the United States is
P = – 2.6 + 2QS
where QS is the quantity of wheat supplied (in billions of bushels), what is the equilibrium price of wheat? What is the equilibrium quantity of wheat sold? Must the actual price equal the equilibrium price? Why or why not?
|Congress established the Federal Reserve System in 1914. Until then, the United States did not have a national currency; Federal Reserve notes are still the paper currency in circulation today. Earlier attempts at establishing a central bank were opposed on the grounds that a central bank would give the federal government monopoly over money. This was a reflection of the historic debate between maintaining states’ rights versus establishing a strong centralized authority in the United States. That is, the creation of the Fed and a national currency would mean that states would no longer have the authority to control the money supply on a regional level. Discuss the debate between states’ rights versus centralized authority in the context of the EMU and the European Central Bank (ECB).|
|Consider the neoclassical consumption model with log utility and ? = 1. Suppose an individual begins with $10,000 in and $30,000 of equity in her house, so that financial assets are ftoday = $40,000. Suppose her labor income stream is $50,000, both today and in the future, and suppose the real interest rate is zero.
(a) What is ctoday and cfuture? How much does the consumer save today?
(b) Suppose the stock market booms, doubling in value. By how much do consumption and saving change today?
(c) Alternatively, suppose housing prices rise so that the individual’s equity in her house rises to $50,000. Now what happens to consumption and saving today?
(d) Discuss briefly how this exercise is related to the state of the U.S. economy around 2007.
|Al has found $1,000 and has decided to divide it between his children, Bud and Kelly.
a. If Al believes that a fair division means giving equal amounts of cash to everyone, how much should he give to Bud and Kelly?
b. Suppose that Bud is rich and Kelly is poor. Assume that the marginal utility provided by a dollar declines the richer you are. If Al wishes to ensure that his gift provides the greatest possible collective happiness to his children, how should he divide the cash?
c. Suppose that Bud is rich and Kelly is poor. Assume that the marginal utility provided by a dollar declines the richer you are. If Al is concerned with distributing equal happiness to Bud and Kelly, how should he divide the cash?
d. How do each of your answers to (a), (b), and (c) align with some notion of fairness?