Question 1

Changes in the health of the average person are relatively unimportant as an indicator of changes in the standard of living.

Accepted Answer

A) True 
 B)False

Question 2

In the United States in 2016, ________ of uninsured people live in families in which at least one member has a job.

Accepted Answer

A)  less than 12% 
B)  about 38% 
C)  more than 70% 
D)  almost 98% 
A)  less than 12% 
B)  about 38% 
C)  more than 70% 
D)  almost 98%

Question 3

Regarding the Patient Protection and Affordable Care Act (ACA),

Accepted Answer

A)  most economists and policymakers agree that the ACA should be repealed and replaced with market-based reforms. 
B)  most economists and policymakers agree that the ACA should be repealed and replaced with a single-payer health care system. 
C)  most economists favor replacing the ACA with market-based reforms and most policymakers favor replacing the ACA with a single-payer health care system. 
D)  there is still considerable debate among economists and policymakers with respect to amending or repealing the ACA. 
A)  most economists and policymakers agree that the ACA should be repealed and replaced with market-based reforms. 
B)  most economists and policymakers agree that the ACA should be repealed and replaced with a single-payer health care system. 
C)  most economists favor replacing the ACA with market-based reforms and most policymakers favor replacing the ACA with a single-payer health care system. 
D)  there is still considerable debate among economists and policymakers with respect to amending or repealing the ACA.

Question 4

The Congressional Budget Office estimates that ________ account(s) for less than 1 percent of health care costs in the United States.

Accepted Answer

A)  the aging population 
B)  uninsured patients receiving treatment in hospital emergency rooms that could have been provided less expensively at doctor's offices 
C)  the payments to settle malpractice lawsuits and the premiums doctors pay for malpractice insurance 
D)  advances in medical technology 
A)  the aging population 
B)  uninsured patients receiving treatment in hospital emergency rooms that could have been provided less expensively at doctor's offices 
C)  the payments to settle malpractice lawsuits and the premiums doctors pay for malpractice insurance 
D)  advances in medical technology

Question 5

The study of the problems due to asymmetric information was begun when economists analyzed which type of market?

Accepted Answer

A)  the market for citrus fruit 
B)  the market for insurance 
C)  farmers' markets 
D)  the market for automobiles 
A)  the market for citrus fruit 
B)  the market for insurance 
C)  farmers' markets 
D)  the market for automobiles

Question 6

Economists who support market-based reforms for health care believe that increased competition among providers of health care would ________ costs and ________ economic efficiency.

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 7

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. With insurance and a third-party payer system, what price do doctors receive for medical services?

Accepted Answer

A)  $40 
B)  $55 
C)  $65 
D)  > $65 
A)  $40 
B)  $55 
C)  $65 
D)  > $65

Question 8

A contract under which a buyer agrees to make payments in exchange for the provider agreeing to pay some or all of the buyer's medical bills is referred to as

Accepted Answer

A)  a fee-for-service plan. 
B)  the Affordable Care Act. 
C)  a deductible. 
D)  health insurance. 
A)  a fee-for-service plan. 
B)  the Affordable Care Act. 
C)  a deductible. 
D)  health insurance.

Question 9

In ________, health care spending per person is significantly higher than the average for most other countries, even taking into account the effects of higher income per person.

Accepted Answer

A)  Austria 
B)  Canada 
C)  Norway 
D)  the United States 
A)  Austria 
B)  Canada 
C)  Norway 
D)  the United States

Question 10

Which of the following is an example of adverse selection?

Accepted Answer

A)  The odds of a fire rise after a building is insured because the person with fire insurance is likely to pay less attention to fire hazards. 
B)  Someone who did not install fire alarms and a sprinkler system in a building he owns buys insurance for the building. 
C)  Someone with automobile insurance drives more recklessly than someone without insurance. 
D)  People prefer to buy new cars rather than used cars. 
A)  The odds of a fire rise after a building is insured because the person with fire insurance is likely to pay less attention to fire hazards. 
B)  Someone who did not install fire alarms and a sprinkler system in a building he owns buys insurance for the building. 
C)  Someone with automobile insurance drives more recklessly than someone without insurance. 
D)  People prefer to buy new cars rather than used cars.

Question 11

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. With insurance and a third-party payer system, the equilibrium 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.

Question 12

In the United States, doctors and hospitals that provide most health care are

Accepted Answer

A)  primarily private firms. 
B)  primarily employed by the government. 
C)  split evenly between private firms and employed by the government. 
D)  100 percent employed by the government. 
A)  primarily private firms. 
B)  primarily employed by the government. 
C)  split evenly between private firms and employed by the government. 
D)  100 percent employed by the government.

Question 13

In 2017, health care's share of gross domestic product in the United States was about

Accepted Answer

A)  6.5 percent. 
B)  18 percent. 
C)  45 percent. 
D)  62.5 percent. 
A)  6.5 percent. 
B)  18 percent. 
C)  45 percent. 
D)  62.5 percent.

Question 14

The health care system in ________ is referred to as a single-payer health care system, and is a system in which the government provides national health insurance to all residents.

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 15

In the United States, consumers usually pay less than the true cost of medical treatment because of

Accepted Answer

A)  adverse selection. 
B)  rising insurance premiums. 
C)  third-party payers. 
D)  rising insurance deductibles. 
A)  adverse selection. 
B)  rising insurance premiums. 
C)  third-party payers. 
D)  rising insurance deductibles.

Question 16

Health insurance plans which typically reimburse doctors mainly by paying a flat fee per patient are known as

Accepted Answer

A)  fee-for-service plans. 
B)  preferred provider organizations. 
C)  single-payer health care systems. 
D)  health maintenance organizations. 
A)  fee-for-service plans. 
B)  preferred provider organizations. 
C)  single-payer health care systems. 
D)  health maintenance organizations.

Question 17

A doctor pursuing his own interests rather than the interests of his patients is an example of the principal-agent problem.

Accepted Answer

A) True 
 B)False

Question 18

The overall decline in death rates in the United States since 1981 was due to all of the following except

Accepted Answer

A)  a decline in smoking. 
B)  the decline in the population. 
C)  the availability of new prescription drugs. 
D)  new surgical techniques. 
A)  a decline in smoking. 
B)  the decline in the population. 
C)  the availability of new prescription drugs. 
D)  new surgical techniques.

Question 19

Some economists have argued that certain characteristics of the delivery of health care justify government intervention. One of these characteristics is

Accepted Answer

A)  health care is a public good. 
B)  health care is nonrivalrous and nonexcludable. 
C)  health care generates negative externalities. 
D)  health care generates positive externalities. 
A)  health care is a public good. 
B)  health care is nonrivalrous and nonexcludable. 
C)  health care generates negative externalities. 
D)  health care generates positive externalities.

Question 20

In the United States from 1981 to 2015, deaths from all of the following declined substantially except

Accepted Answer

A)  cancer. 
B)  kidney disease. 
C)  heart attacks. 
D)  strokes. 
A)  cancer. 
B)  kidney disease. 
C)  heart attacks. 
D)  strokes.

Exam 7: The Economics of Health Care

Changes in the health of the average person are relatively unimportant as an indicator of changes in the standard of living.

In the United States in 2016, ________ of uninsured people live in families in which at least one member has a job.

Regarding the Patient Protection and Affordable Care Act (ACA),

The Congressional Budget Office estimates that ________ account(s) for less than 1 percent of health care costs in the United States.

The study of the problems due to asymmetric information was begun when economists analyzed which type of market?

Economists who support market-based reforms for health care believe that increased competition among providers of health care would ________ costs and ________ economic efficiency.

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. With insurance and a third-party payer system, what price do doctors receive for medical services?

A contract under which a buyer agrees to make payments in exchange for the provider agreeing to pay some or all of the buyer's medical bills is referred to as

In ________, health care spending per person is significantly higher than the average for most other countries, even taking into account the effects of higher income per person.

Which of the following is an example of adverse selection?

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. With insurance and a third-party payer system, the equilibrium quantity of medical services is

In the United States, doctors and hospitals that provide most health care are

In 2017, health care's share of gross domestic product in the United States was about

The health care system in ________ is referred to as a single-payer health care system, and is a system in which the government provides national health insurance to all residents.

In the United States, consumers usually pay less than the true cost of medical treatment because of

Health insurance plans which typically reimburse doctors mainly by paying a flat fee per patient are known as

A doctor pursuing his own interests rather than the interests of his patients is an example of the principal-agent problem.

The overall decline in death rates in the United States since 1981 was due to all of the following except

Some economists have argued that certain characteristics of the delivery of health care justify government intervention. One of these characteristics is

In the United States from 1981 to 2015, deaths from all of the following declined substantially except

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

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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

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Money, Banks, and the Federal Reserve System

Monetary Policy

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Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

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Economists who support market-based reforms for health care believe that increased competition among providers of health care would costs and economic efficiency.