Exam 7: The Economics of Health Care

In the 1973 movie Save the Tiger, Jack Lemmon plays Harry Stoner, the CEO of a clothing manufacturer whose business has fallen on hard times. In one of the key scenes of the movie, Stoner tries to convince his partner that they should hire someone to burn one of their buildings in order to collect on their insurance policy. Harry Stoner's actions are an example of

Higher deductibles for employer-provided health insurance will tend to shift the ________ curve for medical services to the ________.

Adverse selection occurs in the market for used cars because used car buyers

Because consumers who have insurance provided by their employers usually only pay a deductible for a visit to the doctor's office, they ________ of health care services than they would if they paid a price that better represented the true cost of providing the service.

If a buyer in an economic transaction has more information than the seller, the buyer benefits at the expense of the seller. This phenomenon is due to

What is the main difference between a single-payer health care system and socialized medicine?

What is asymmetric information?

In the United States, out-of-pocket spending on health care as a percentage of all spending on health care has ________ since 1960.

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

In the United States in 2016, the percentage of people who received health insurance through a government program was about

The increase in the number of surgeries performed outside hospitals will tend to shift the ________ curve for medical services to the ________.

Figure 7-6 Figure 7-6 represents the supply and demand for medical services with and without a third-party payer. -Refer to Figure 7-6. Answer the following questions: 1. What would be the equilibrium price and quantity if consumers had to pay the full price of medical services? 2. With insurance acting as a third-party payer, what price will consumers pay for medical service? 3. With insurance acting as a third-party payer, what price will doctors receive for medical service? 4. With insurance acting as a third-party payer, what will be the equilibrium quantity of medical services? 5. With insurance acting as a third-party payer, what will be the value of the deadweight loss?

About ________ of research on new medicines is carried out in the United States.

Vaccinations tend to result in a positive externality.

Briefly describe changes in life expectancy, average height, and infant mortality in the United States since 1850.

In the United States in 2016, a majority of people received health care through

In the United States in 2016, the percentage of firms that employed between 3 and 199 workers and did not offer health insurance as a fringe benefit to the workers was about

Because of asymmetric information, most used cars that are offered for sale will be sold for prices that are greater than their true value. Because of this fact, the used car market falls victim to

In 2016, ________ of the uninsured were younger than age 35.

In a market with positive externalities, the market equilibrium quantity will be less than the efficient equilibrium quantity.