Question 1

________ occurs when one party takes advantage of having more information than another party about the attributes of the good or service they will exchange.

Accepted Answer

A)  A negative externality 
B)  Moral hazard 
C)  A transaction cost 
D)  Adverse selection 
A)  A negative externality 
B)  Moral hazard 
C)  A transaction cost 
D)  Adverse selection D

Question 2

Figure 7-4   Figure 7-4 represents the market for medical services with and without insurance, and the effect of a third-party payer system on the demand for medical services.
-Refer to Figure 7-4. If consumers paid the full price of medical services, the equilibrium quantity would be

Accepted Answer

A)  200. 
B)  500. 
C)  700. 
D)  >700. 
A)  200. 
B)  500. 
C)  700. 
D)  >700. B

Question 3

Figure 7-5   Figure 7-5 represents the market for medical services with and without insurance, and the effect of a third-party payer system on the demand for medical services.
-Refer to Figure 7-5. The efficient quantity of medical services is

Accepted Answer

A)  400. 
B)  800. 
C)  1,200. 
D)  > 1,200. 
A)  400. 
B)  800. 
C)  1,200. 
D)  > 1,200. B

Question 4

The individual mandate provision of the ACA requires

Accepted Answer

A)  every U.S. resident to have health insurance. 
B)  every U.S. company to provide health insurance to its employees. 
C)  every employed person to pay for his or her own health insurance. 
D)  every private insurance company to provide free health care to its current policy holders. 
A)  every U.S. resident to have health insurance. 
B)  every U.S. company to provide health insurance to its employees. 
C)  every employed person to pay for his or her own health insurance. 
D)  every private insurance company to provide free health care to its current policy holders.

Question 5

Of the following high-income countries, which has the highest obesity rate?

Accepted Answer

A)  Canada 
B)  Japan 
C)  the United Kingdom 
D)  the United States 
A)  Canada 
B)  Japan 
C)  the United Kingdom 
D)  the United States

Question 6

Which of the following is not an argument used by economists and policymakers who are in favor of moving toward greater government involvement in health care?

Accepted Answer

A)  The increased competition that results from market-based reforms would reduce health care costs and increase economic efficiency. 
B)  A single-payer system would reduce the paperwork caused by the current system. 
C)  The current Medicare system has had lower administrative costs than have private health insurance companies. 
D)  The systems in most other high-income countries have lower levels of health care spending per person which still providing good health outcomes. 
A)  The increased competition that results from market-based reforms would reduce health care costs and increase economic efficiency. 
B)  A single-payer system would reduce the paperwork caused by the current system. 
C)  The current Medicare system has had lower administrative costs than have private health insurance companies. 
D)  The systems in most other high-income countries have lower levels of health care spending per person which still providing good health outcomes.

Question 7

Of the following U.S. presidents, which was the first to propose a national health insurance program to Congress?

Accepted Answer

A)  Barack Obama 
B)  Bill Clinton 
C)  John F. Kennedy 
D)  Harry Truman 
A)  Barack Obama 
B)  Bill Clinton 
C)  John F. Kennedy 
D)  Harry Truman

Question 8

Over the past 165 years in the United States, life expectancy

Accepted Answer

A)  has remained fairly constant. 
B)  has slightly declined. 
C)  has more than doubled. 
D)  increased up to the 1950s and then declined for the next 60 years. 
A)  has remained fairly constant. 
B)  has slightly declined. 
C)  has more than doubled. 
D)  increased up to the 1950s and then declined for the next 60 years.

Question 9

Adverse selection will occur in a market as a result of

Accepted Answer

A)  asymmetric information. 
B)  moral hazard. 
C)  the sale of "lemons." 
D)  rational ignorance. 
A)  asymmetric information. 
B)  moral hazard. 
C)  the sale of "lemons." 
D)  rational ignorance.

Question 10

In the United States in 2016, the percentage of people that directly purchased an individual or family health insurance policy from an insurance company was about

Accepted Answer

A)  2%. 
B)  7%. 
C)  17%. 
D)  26%. 
A)  2%. 
B)  7%. 
C)  17%. 
D)  26%.

Question 11

________ occurs when actions taken by one party to a transaction are different from what the other party expected at the time of the transaction.

Accepted Answer

A)  Adverse selection 
B)  Risk aversion 
C)  Fraud 
D)  Moral hazard 
A)  Adverse selection 
B)  Risk aversion 
C)  Fraud 
D)  Moral hazard

Question 12

Some economists have proposed making the tax treatment of employer-provided health insurance the same as the tax treatment of individually purchased health insurance and out-of-pocket health care spending. Such changes would make it more likely that

Accepted Answer

A)  consumers would pay prices closer to the actual costs for routine medical care. 
B)  employers would provide more generous medical coverage to their employees. 
C)  insurance deductibles would decrease. 
D)  the quantity of medical services demanded would increase. 
A)  consumers would pay prices closer to the actual costs for routine medical care. 
B)  employers would provide more generous medical coverage to their employees. 
C)  insurance deductibles would decrease. 
D)  the quantity of medical services demanded would increase.

Question 13

In which of the following countries are substantial co-payments typically required as a part of the health care system?

Accepted Answer

A)  Canada and the United States 
B)  Japan and Canada 
C)  the United States and Japan 
D)  the United States and the United Kingdom 
A)  Canada and the United States 
B)  Japan and Canada 
C)  the United States and Japan 
D)  the United States and the United Kingdom

Question 14

Life expectancy at birth in the United States has more than doubled since 1850.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is a part of the "employer mandate" provision of the Patient Protection and Affordable Care Act (ACA)?

Accepted Answer

A)  Every firm with more than 3 full-time employees must offer health insurance to its employees and must automatically enroll them in the plan. 
B)  Small businesses with fewer than 50 employees are exempt from being required to participate in the program. 
C)  Firms with 50 or more full-time employees must offer health insurance or pay a fee up to $3,390 to the federal government for every employee who receives a tax credit from the federal government for obtaining health insurance through a health insurance marketplace. 
D)  Every resident of the United States must have health insurance that meets certain basic requirements. 
A)  Every firm with more than 3 full-time employees must offer health insurance to its employees and must automatically enroll them in the plan. 
B)  Small businesses with fewer than 50 employees are exempt from being required to participate in the program. 
C)  Firms with 50 or more full-time employees must offer health insurance or pay a fee up to $3,390 to the federal government for every employee who receives a tax credit from the federal government for obtaining health insurance through a health insurance marketplace. 
D)  Every resident of the United States must have health insurance that meets certain basic requirements.

Question 16

In the United States in 2016, the percentage of firms that employed between 3 and 199 workers and offered health insurance as a fringe benefit to the workers was about

Accepted Answer

A)  29%. 
B)  42%. 
C)  55%. 
D)  98%. 
A)  29%. 
B)  42%. 
C)  55%. 
D)  98%.

Question 17

The aging of the U.S. population has tended to ________ spending on health care, and the development of new drugs and medical equipment has tended to ________ spending on health care.

Accepted Answer

A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease 
A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease

Question 18

In the United States in 2016, the health care industry was the largest employer in ________ states.

Accepted Answer

A)  7 
B)  27 
C)  35 
D)  48 
A)  7 
B)  27 
C)  35 
D)  48

Question 19

Some economists and policymakers who are in favor of government-provided health care believe that providing health care will

Accepted Answer

A)  generate additional moral hazard. 
B)  create negative externalities. 
C)  reduce asymmetric information. 
D)  generate more adverse selection. 
A)  generate additional moral hazard. 
B)  create negative externalities. 
C)  reduce asymmetric information. 
D)  generate more adverse selection.

Question 20

In the United States from 1981 to 2015, deaths from ________ increased largely due to the effects of increasing obesity.

Accepted Answer

A)  strokes 
B)  cancer 
C)  heart attacks 
D)  diabetes 
A)  strokes 
B)  cancer 
C)  heart attacks 
D)  diabetes

Exam 7: The Economics of Health Care

________ occurs when one party takes advantage of having more information than another party about the attributes of the good or service they will exchange.

Figure 7-4 Figure 7-4 represents the market for medical services with and without insurance, and the effect of a third-party payer system on the demand for medical services. -Refer to Figure 7-4. If consumers paid the full price of medical services, the equilibrium quantity would be

Figure 7-5 Figure 7-5 represents the market for medical services with and without insurance, and the effect of a third-party payer system on the demand for medical services. -Refer to Figure 7-5. The efficient quantity of medical services is

The individual mandate provision of the ACA requires

Of the following high-income countries, which has the highest obesity rate?

Which of the following is not an argument used by economists and policymakers who are in favor of moving toward greater government involvement in health care?

Of the following U.S. presidents, which was the first to propose a national health insurance program to Congress?

Over the past 165 years in the United States, life expectancy

Adverse selection will occur in a market as a result of

In the United States in 2016, the percentage of people that directly purchased an individual or family health insurance policy from an insurance company was about

________ occurs when actions taken by one party to a transaction are different from what the other party expected at the time of the transaction.

Some economists have proposed making the tax treatment of employer-provided health insurance the same as the tax treatment of individually purchased health insurance and out-of-pocket health care spending. Such changes would make it more likely that

In which of the following countries are substantial co-payments typically required as a part of the health care system?

Life expectancy at birth in the United States has more than doubled since 1850.

Which of the following is a part of the "employer mandate" provision of the Patient Protection and Affordable Care Act (ACA)?

In the United States in 2016, the percentage of firms that employed between 3 and 199 workers and offered health insurance as a fringe benefit to the workers was about

The aging of the U.S. population has tended to ________ spending on health care, and the development of new drugs and medical equipment has tended to ________ spending on health care.

In the United States in 2016, the health care industry was the largest employer in ________ states.

Some economists and policymakers who are in favor of government-provided health care believe that providing health care will

In the United States from 1981 to 2015, deaths from ________ increased largely due to the effects of increasing obesity.

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

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The aging of the U.S. population has tended to spending on health care, and the development of new drugs and medical equipment has tended to spending on health care.