Question 1

All of the following are part of the "state health insurance marketplaces" provision of the Patient Protection and Affordable Care Act (ACA) except

Accepted Answer

A)  each state is required to establish an Affordable Insurance Exchange. 
B)  small businesses with fewer than 50 employees are exempt from being required to participate in the program. 
C)  low-income individuals are eligible for tax credits to offset the costs of buying health insurance. 
D)  the marketplaces offer health insurance policies that meet certain specified requirements. 
A)  each state is required to establish an Affordable Insurance Exchange. 
B)  small businesses with fewer than 50 employees are exempt from being required to participate in the program. 
C)  low-income individuals are eligible for tax credits to offset the costs of buying health insurance. 
D)  the marketplaces offer health insurance policies that meet certain specified requirements.

Question 2

The Japanese system of universal health insurance requires no copayments from residents for health services.

Accepted Answer

A) True 
 B)False

Question 3

The provision of the Patient Protection and Affordable Care Act (ACA) which states that every firm with more than 200 full-time employees must offer health insurance to its employees and must automatically enroll them in the plan is the ________ provision.

Accepted Answer

A)  employer mandate 
B)  state health insurance marketplaces 
C)  individual mandate 
D)  regulation of health insurance 
A)  employer mandate 
B)  state health insurance marketplaces 
C)  individual mandate 
D)  regulation of health insurance

Question 4

The term that is used to refer to a situation in which one party to an economic transaction has less information than the other party is

Accepted Answer

A)  inefficient market hypothesis. 
B)  moral hazard. 
C)  information disparity. 
D)  asymmetric information. 
A)  inefficient market hypothesis. 
B)  moral hazard. 
C)  information disparity. 
D)  asymmetric information.

Question 5

Most doctors are employed by the government and most hospitals are owned by the government in

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

Two consequences of asymmetric information are adverse selection and moral hazard. An important distinction between the two is

Accepted Answer

A)  adverse selection exists prior to the completion of a transaction while moral hazard occurs after the transaction is completed. 
B)  moral hazard exists prior to the completion of a transaction while adverse selection occurs after the transaction is completed. 
C)  adverse selection leads to an inefficient quantity while moral hazard leads to an efficient quantity. 
D)  moral hazard leads to an inefficient quantity while adverse selection leads to an efficient quantity. 
A)  adverse selection exists prior to the completion of a transaction while moral hazard occurs after the transaction is completed. 
B)  moral hazard exists prior to the completion of a transaction while adverse selection occurs after the transaction is completed. 
C)  adverse selection leads to an inefficient quantity while moral hazard leads to an efficient quantity. 
D)  moral hazard leads to an inefficient quantity while adverse selection leads to an efficient quantity.

Question 7

How do current tax laws in the United States favor employer-based health care insurance?

Accepted Answer

A)  Individuals who receive health insurance benefits are allowed to deduct the value of these benefits from their taxable income. 
B)  Employers who provide health insurance benefits are reimbursed by the government and are not taxed on these reimbursements. 
C)  Individuals who receive health insurance benefits do not pay taxes on the value of these benefits. 
D)  Health insurance companies that provide insurance to employers are subject to a lower tax rate than those insurance companies that provide insurance to private individuals. 
A)  Individuals who receive health insurance benefits are allowed to deduct the value of these benefits from their taxable income. 
B)  Employers who provide health insurance benefits are reimbursed by the government and are not taxed on these reimbursements. 
C)  Individuals who receive health insurance benefits do not pay taxes on the value of these benefits. 
D)  Health insurance companies that provide insurance to employers are subject to a lower tax rate than those insurance companies that provide insurance to private individuals.

Question 8

Economists who support market-based reforms for health care believe that increased competition among providers of health care would

Accepted Answer

A)  decrease costs but decrease economic efficiency. 
B)  decrease costs and increase economic efficiency. 
C)  increase costs but increase economic efficiency. 
D)  increase costs and decrease economic efficiency. 
A)  decrease costs but decrease economic efficiency. 
B)  decrease costs and increase economic efficiency. 
C)  increase costs but increase economic efficiency. 
D)  increase costs and decrease economic efficiency.

Question 9

Under current U.S. tax laws, individuals do not pay taxes on health insurance benefits they receive from their employers.

Accepted Answer

A) True 
 B)False

Question 10

Under the Patient Protection and Affordable Care Act (ACA), residents who do not have health insurance will not be allowed to seek employment.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A)  more; adverse selection 
B)  more; rising insurance premiums 
C)  less; third-party payers 
D)  less; rising insurance deductibles 
A)  more; adverse selection 
B)  more; rising insurance premiums 
C)  less; third-party payers 
D)  less; rising insurance deductibles

Question 12

Most employees ________ pay taxes on the value of health insurance provided by employers, and most people ________ get a tax break when buying individual health insurance policies.

Accepted Answer

A)  do; do 
B)  do; do not 
C)  do not; do 
D)  do not; do not 
A)  do; do 
B)  do; do not 
C)  do not; do 
D)  do not; do not

Question 13

Because consumers who have insurance provided by their employers usually only pay a deductible for a visit to the doctor's office

Accepted Answer

A)  they demand a larger quantity of health care services than they would if they paid a price that better represented the true cost of providing the service. 
B)  they demand a smaller quantity of health care services than they would if they paid a price that better represented the true cost of providing the service. 
C)  the doctors supply a smaller quantity of health care services than they would if the consumer paid a price that better represented the true cost of providing the service. 
D)  the insurance companies provide a larger quantity of health care services than they would if the consumer paid a price that better represented the true cost of providing the service. 
A)  they demand a larger quantity of health care services than they would if they paid a price that better represented the true cost of providing the service. 
B)  they demand a smaller quantity of health care services than they would if they paid a price that better represented the true cost of providing the service. 
C)  the doctors supply a smaller quantity of health care services than they would if the consumer paid a price that better represented the true cost of providing the service. 
D)  the insurance companies provide a larger quantity of health care services than they would if the consumer paid a price that better represented the true cost of providing the service.

Question 14

Moral hazard refers to the actions people take after they have entered into a transaction that make the other party to the transaction worse off.

Accepted Answer

A) True 
 B)False

Question 15

Typically, the higher the level of income per person in a country, the higher the level of spending per person on health care. This relationship between income and spending indicates that health care is a

Accepted Answer

A)  normal good. 
B)  inferior good. 
C)  luxury. 
D)  necessity. 
A)  normal good. 
B)  inferior good. 
C)  luxury. 
D)  necessity.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

The health care system in ________ is referred to as socialized medicine, under which the government owns most of the hospitals and employs most of the doctors.

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 18

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

Accepted Answer

A)  $25 
B)  $40 
C)  $55 
D)  >$55 
A)  $25 
B)  $40 
C)  $55 
D)  >$55

Question 19

Health problems prevent people from working harder, which can lower a country's total income. This indicates that in effect, health problems

Accepted Answer

A)  are a primary cause of price decreases. 
B)  increase the incentive to work. 
C)  shift a country's production possibilities frontier inward. 
D)  decrease consumer surplus. 
A)  are a primary cause of price decreases. 
B)  increase the incentive to work. 
C)  shift a country's production possibilities frontier inward. 
D)  decrease consumer surplus.

Question 20

Health insurance plans which typically reimburse doctors and hospitals with payment for each service they provide 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.

Exam 7: The Economics of Health Care

All of the following are part of the "state health insurance marketplaces" provision of the Patient Protection and Affordable Care Act (ACA) except

The Japanese system of universal health insurance requires no copayments from residents for health services.

The provision of the Patient Protection and Affordable Care Act (ACA) which states that every firm with more than 200 full-time employees must offer health insurance to its employees and must automatically enroll them in the plan is the ________ provision.

The term that is used to refer to a situation in which one party to an economic transaction has less information than the other party is

Most doctors are employed by the government and most hospitals are owned by the government in

Two consequences of asymmetric information are adverse selection and moral hazard. An important distinction between the two is

How do current tax laws in the United States favor employer-based health care insurance?

Economists who support market-based reforms for health care believe that increased competition among providers of health care would

Under current U.S. tax laws, individuals do not pay taxes on health insurance benefits they receive from their employers.

Under the Patient Protection and Affordable Care Act (ACA), residents who do not have health insurance will not be allowed to seek employment.

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

Most employees ________ pay taxes on the value of health insurance provided by employers, and most people ________ get a tax break when buying individual health insurance policies.

Because consumers who have insurance provided by their employers usually only pay a deductible for a visit to the doctor's office

Moral hazard refers to the actions people take after they have entered into a transaction that make the other party to the transaction worse off.

Typically, the higher the level of income per person in a country, the higher the level of spending per person on health care. This relationship between income and spending indicates that health care is a

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

The health care system in ________ is referred to as socialized medicine, under which the government owns most of the hospitals and employs most of the doctors.

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

Health problems prevent people from working harder, which can lower a country's total income. This indicates that in effect, health problems

Health insurance plans which typically reimburse doctors and hospitals with payment for each service they provide are known as

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

Filters

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

Most employees pay taxes on the value of health insurance provided by employers, and most people get a tax break when buying individual health insurance policies.