If a Price Ceiling on Physician Services Is Going to Be

question 8

Multiple Choice

If a price ceiling on physician services is going to be effective, it must be set ______ the competitive market equilibrium price to prevent the market from driving the price _______.

• A) below; up
• B) below; down
• C) equal to; up
• D) above; down
• E) above; up

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Definitions:

FICA Taxes

Federal taxes required to be deducted from employees' wages for Social Security and Medicare, also paid in part by employers.

Adjusted Gross Income

The measure of one's taxable income, calculated as gross income minus allowable adjustments.

Deductible Contribution

A contribution to a qualified plan or account that is eligible to be deducted from the contributor's gross income for tax purposes.

Nonprofit Cemetery

A burial ground operated by an organization that does not seek to make a profit, often eligible for certain tax exemptions.