Question 1

In most circumstances, employees pay taxes on the value of health insurance their employers provide them.

Accepted Answer

A) True 
 B)False

Question 2

Between 1981 and 2015, the overall mortality rate in the United States

Accepted Answer

A)  decreased by more than 25 percent. 
B)  slowly but steadily increased. 
C)  remained fairly constant. 
D)  was similar to the average rate in most low-income countries. 
A)  decreased by more than 25 percent. 
B)  slowly but steadily increased. 
C)  remained fairly constant. 
D)  was similar to the average rate in most low-income countries.

Question 3

An insurance company is likely to attract customers like Clancy who want to purchase insurance because he knows better that the company that he is more likely to make a claim on a policy. What is the term used to describe the situation above?

Accepted Answer

A)  moral hazard 
B)  adverse selection 
C)  asymmetric information 
D)  economic irrationality 
A)  moral hazard 
B)  adverse selection 
C)  asymmetric information 
D)  economic irrationality

Question 4

A typical consumer of health care in the United States

Accepted Answer

A)  pays the full price of his or her health care. 
B)  pays more than the full price of his or her health care. 
C)  does not pay any of the price of his or her health care. 
D)  does not pay the full price of his or her health care. 
A)  pays the full price of his or her health care. 
B)  pays more than the full price of his or her health care. 
C)  does not pay any of the price of his or her health care. 
D)  does not pay the full price of his or her health care.

Question 5

Because of the positive externality of vaccinations, economic efficiency would be improved

Accepted Answer

A)  if fewer people were vaccinated. 
B)  if more people were vaccinated. 
C)  only if all people were vaccinated. 
D)  only if no people were vaccinated. 
A)  if fewer people were vaccinated. 
B)  if more people were vaccinated. 
C)  only if all people were vaccinated. 
D)  only if no people were vaccinated.

Question 6

On average, people in low-income countries ________ than people in high-income countries.

Accepted Answer

A)  have a longer life expectancy 
B)  are subject to a lower infant mortality rate 
C)  are shorter 
D)  are exposed to fewer severe diseases 
A)  have a longer life expectancy 
B)  are subject to a lower infant mortality rate 
C)  are shorter 
D)  are exposed to fewer severe diseases

Question 7

Adverse selection is a situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction.

Accepted Answer

A) True 
 B)False

Question 8

What is moral hazard?

Accepted Answer

Moral hazard is a tendency for

Question 9

In the United States, health care spending as a percentage of GDP has declined since 1965.

Accepted Answer

A) True 
 B)False

Question 10

In 2016, the average height of adult males in the United States was

Accepted Answer

A)  5' 7.0". 
B)  5' 9.3". 
C)  6' 0.0". 
D)  6' 4.75". 
A)  5' 7.0". 
B)  5' 9.3". 
C)  6' 0.0". 
D)  6' 4.75".

Question 11

In most circumstances, employees do not pay taxes on the value of health insurance their employers provide them.

Accepted Answer

A) True 
 B)False

Question 12

The U.S. Bureau of Labor Statistics forecasts that ________ fastest-growing occupations over the next 10 years will be in health care.

Accepted Answer

A)  over 95 percent of the 
B)  less than 2 of the 10 
C)  13 of the 20 
D)  just under half of the 
A)  over 95 percent of the 
B)  less than 2 of the 10 
C)  13 of the 20 
D)  just under half of the

Question 13

In the United States, the bulk of health care spending is paid by health insurance companies. Such a system is also called a ________ where consumers of health care pay a nominal fee and the rest is paid by the health insurance provider.

Accepted Answer

A)  universal health care system 
B)  third-party payer system 
C)  socialized medicine system 
D)  single-payer system 
A)  universal health care system 
B)  third-party payer system 
C)  socialized medicine system 
D)  single-payer system

Question 14

"Cost disease" refers to the tendency for low productivity in the service sector to lead to higher costs in those industries.

Accepted Answer

A) True 
 B)False

Question 15

Adverse selection is a situation in which one party to an economic transaction has less information than the other party.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not an advantage to an insurance company of insuring a large group of people for health insurance?

Accepted Answer

A)  The characteristics of a large group are likely to reflect those of the entire population. 
B)  It is easier to accurately predict the number of claims for a group than for an individual. 
C)  When all group members pay the premium, the problem of moral hazard is reduced. 
D)  When all group members pay the premium, the problem of adverse selection is reduced. 
A)  The characteristics of a large group are likely to reflect those of the entire population. 
B)  It is easier to accurately predict the number of claims for a group than for an individual. 
C)  When all group members pay the premium, the problem of moral hazard is reduced. 
D)  When all group members pay the premium, the problem of adverse selection is reduced.

Question 17

If a state requires all drivers to purchase auto insurance, insurance companies still face the problem of

Accepted Answer

A)  correctly pricing their insurance. 
B)  sunk costs. 
C)  adverse selection. 
D)  excess demand for their insurance. 
A)  correctly pricing their insurance. 
B)  sunk costs. 
C)  adverse selection. 
D)  excess demand for their insurance.

Exam 7: The Economics of Health Care

In most circumstances, employees pay taxes on the value of health insurance their employers provide them.

Between 1981 and 2015, the overall mortality rate in the United States

An insurance company is likely to attract customers like Clancy who want to purchase insurance because he knows better that the company that he is more likely to make a claim on a policy. What is the term used to describe the situation above?

A typical consumer of health care in the United States

Because of the positive externality of vaccinations, economic efficiency would be improved

On average, people in low-income countries ________ than people in high-income countries.

Adverse selection is a situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction.

What is moral hazard?

In the United States, health care spending as a percentage of GDP has declined since 1965.

In 2016, the average height of adult males in the United States was

In most circumstances, employees do not pay taxes on the value of health insurance their employers provide them.

The U.S. Bureau of Labor Statistics forecasts that ________ fastest-growing occupations over the next 10 years will be in health care.

In the United States, the bulk of health care spending is paid by health insurance companies. Such a system is also called a ________ where consumers of health care pay a nominal fee and the rest is paid by the health insurance provider.

"Cost disease" refers to the tendency for low productivity in the service sector to lead to higher costs in those industries.

Adverse selection is a situation in which one party to an economic transaction has less information than the other party.

Which of the following is not an advantage to an insurance company of insuring a large group of people for health insurance?

If a state requires all drivers to purchase auto insurance, insurance companies still face the problem of

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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