Question 1

There is a consensus among economists that the amount of resources allocated to the health care industry is optimal.

Accepted Answer

A) True 
 B)False

Question 2

(Consider This) Which of the following best explains why hospital charges of $25 per aspirin are not unusual?

Accepted Answer

A) Government payments for Medicare and Medicaid patients do not cover hospitals' fixed costs, so these costs must be distributed to other patients and their private insurance providers. 
B) Government exercises no cost control for Medicare and Medicaid, so hospitals get away with charging those patients $25 for an aspirin. 
C) Pharmaceutical companies have monopoly power over hospitals, allowing them to charge high prices for medications. 
D) Hospitals distribute a medically advanced form of aspirin that costs more to produce. 
A) Government payments for Medicare and Medicaid patients do not cover hospitals' fixed costs, so these costs must be distributed to other patients and their private insurance providers. 
B) Government exercises no cost control for Medicare and Medicaid, so hospitals get away with charging those patients $25 for an aspirin. 
C) Pharmaceutical companies have monopoly power over hospitals, allowing them to charge high prices for medications. 
D) Hospitals distribute a medically advanced form of aspirin that costs more to produce.

Question 3

The experiences of Singapore, Whole Foods Markets, and the State of Indiana all point to one major factor that could reduce, if not eliminate, overconsumption of health care.And that is

Accepted Answer

A) reducing the coverage of insured illnesses. 
B) high out-of-pocket costs to consumers. 
C) raising the health-insurance premiums. 
D) privatizing health insurance. 
A) reducing the coverage of insured illnesses. 
B) high out-of-pocket costs to consumers. 
C) raising the health-insurance premiums. 
D) privatizing health insurance.

Question 4

What is the primary purpose of the insurance exchanges set up by the PPACA?

Accepted Answer

A) provide direct care to those without employer-provided health insurance 
B) allow those with employer-provided health insurance to trade for policies that are more cost effective 
C) sell government-provided health insurance to those lacking employer coverage 
D) promote competition among insurance companies to help reduce the growth in health care spending 
A) provide direct care to those without employer-provided health insurance 
B) allow those with employer-provided health insurance to trade for policies that are more cost effective 
C) sell government-provided health insurance to those lacking employer coverage 
D) promote competition among insurance companies to help reduce the growth in health care spending

Question 5

Which factor will tend to increase the demand for health care?

Accepted Answer

A) an improvement in medical technology 
B) a reduction in subsidies for Medicare 
C) an increase in the productivity of physicians 
D) an increase in the average age of the population 
A) an improvement in medical technology 
B) a reduction in subsidies for Medicare 
C) an increase in the productivity of physicians 
D) an increase in the average age of the population

Question 6

People 65 years old and older constituted about 9 percent of the U.S.population in 1960.In 2014, this percentage was around

Accepted Answer

A) the same as in 1960. 
B) 14 percent. 
C) 25 percent. 
D) 5 percent. 
A) the same as in 1960. 
B) 14 percent. 
C) 25 percent. 
D) 5 percent.

Question 7

Aggregate U.S.health care spending in 2014 was approximately

Accepted Answer

A) 5.2 percent of domestic output (GDP). 
B) 13.1 percent of domestic output (GDP). 
C) 17.5 percent of domestic output (GDP). 
D) 21 percent of domestic output (GDP). 
A) 5.2 percent of domestic output (GDP). 
B) 13.1 percent of domestic output (GDP). 
C) 17.5 percent of domestic output (GDP). 
D) 21 percent of domestic output (GDP).

Question 8

Preferred provider organizations (PPOs)

Accepted Answer

A) charge a fixed amount per member, hire many of their own physicians, and provide health services only to members. 
B) require that their members give up the right to file medical malpractice suits. 
C) are illegal in several states. 
D) require physicians and hospitals to provide discounted prices for their services as a condition for being included in the insurance plan. 
A) charge a fixed amount per member, hire many of their own physicians, and provide health services only to members. 
B) require that their members give up the right to file medical malpractice suits. 
C) are illegal in several states. 
D) require physicians and hospitals to provide discounted prices for their services as a condition for being included in the insurance plan.

Question 9

The health care industry encompasses the following sectors, except

Accepted Answer

A) medical laboratories. 
B) nursing homes. 
C) nonprescription drugs. 
D) health clubs. 
A) medical laboratories. 
B) nursing homes. 
C) nonprescription drugs. 
D) health clubs.

Question 10

Which of the following is not a reason why the demand for health care in the U.S.is quite price-inelastic?

Accepted Answer

A) People consider health care to be a luxury. 
B) There are only a few, or no, substitutes. 
C) Most consumers do not shop around, preferring a long-term relationship with their doctors. 
D) Most patients have insurance, effectively removing their budget constraint for health care. 
A) People consider health care to be a luxury. 
B) There are only a few, or no, substitutes. 
C) Most consumers do not shop around, preferring a long-term relationship with their doctors. 
D) Most patients have insurance, effectively removing their budget constraint for health care.

Question 11

The Patient Protection and Affordable Care Act (PPACA) of 2010 is more commonly known as

Accepted Answer

A) Dodd Frank. 
B) Obamacare. 
C) stimulus spending. 
D) quantitative easing (Q
E) . 
A) Dodd Frank. 
B) Obamacare. 
C) stimulus spending. 
D) quantitative easing (Q
E) .

Question 12

With an intent to identify potential cost savings (which unfortunately have not materialized), the HITECH Act of 2009 provides $20 billion of subsidies to encourage hospitals and physicians to

Accepted Answer

A) use more high-tech diagnostic equipment. 
B) adopt electronic medical-records systems. 
C) switch from human lab technicians to electronic ones. 
D) devote more research efforts toward high-tech treatments. 
A) use more high-tech diagnostic equipment. 
B) adopt electronic medical-records systems. 
C) switch from human lab technicians to electronic ones. 
D) devote more research efforts toward high-tech treatments.

Question 13

Theoretically, the effect of private health insurance on the price and quantity of health care consumed

Accepted Answer

A) is the same as that of public health insurance. 
B) is a lower price and a higher quantity compared to public health insurance. 
C) is a higher price and a lower quantity compared to public health insurance. 
D) is a lower price and a lower quantity compared to public health insurance. 
A) is the same as that of public health insurance. 
B) is a lower price and a higher quantity compared to public health insurance. 
C) is a higher price and a lower quantity compared to public health insurance. 
D) is a lower price and a lower quantity compared to public health insurance.

Question 14

The Patient Protection and Affordable Care Act (PPACA) attempts to provide health-insurance coverage to low-income people through the following methods, except

Accepted Answer

A) establishing a new government insurance system specifically for the poor. 
B) requiring large employers to cover all their employees, including the poor. 
C) expanding the Medicaid system to cover those whose incomes are less than 133 percent of the poverty level. 
D) providing subsidies to purchase health insurance to those who must buy insurance coverage on their own. 
A) establishing a new government insurance system specifically for the poor. 
B) requiring large employers to cover all their employees, including the poor. 
C) expanding the Medicaid system to cover those whose incomes are less than 133 percent of the poverty level. 
D) providing subsidies to purchase health insurance to those who must buy insurance coverage on their own.

Question 15

The two main types of managed-care organizations are

Accepted Answer

A) U.S.veterans' hospitals and university health clinics. 
B) health maintenance organizations (HMOs) and private nursing homes. 
C) health maintenance organizations (HMOs) and preferred provider organizations (PPOs). 
D) preferred provider organizations (PPOs) and nonprofit hospitals. 
A) U.S.veterans' hospitals and university health clinics. 
B) health maintenance organizations (HMOs) and private nursing homes. 
C) health maintenance organizations (HMOs) and preferred provider organizations (PPOs). 
D) preferred provider organizations (PPOs) and nonprofit hospitals.

Question 16

Rapidly rising U.S.health care costs have

Accepted Answer

A) forced the growth of wages to keep pace. 
B) encouraged outsourcing. 
C) caused some employers to use more part-time and temporary workers. 
D) done all of these. 
A) forced the growth of wages to keep pace. 
B) encouraged outsourcing. 
C) caused some employers to use more part-time and temporary workers. 
D) done all of these.

Question 17

Subsidies for those required to purchase health insurance under the personal mandate provision of the PPACA are

Accepted Answer

A) limited to those whose income is less than 133 percent of the federal poverty line. 
B) limited to those whose income is at or below the federal poverty line. 
C) provided to some individuals in the upper half of the income distribution. 
D) a fixed amount per person for those eligible to receive the subsidies. 
A) limited to those whose income is less than 133 percent of the federal poverty line. 
B) limited to those whose income is at or below the federal poverty line. 
C) provided to some individuals in the upper half of the income distribution. 
D) a fixed amount per person for those eligible to receive the subsidies.

Question 18

Because employer payments for health insurance are not subject to income or payroll taxes, government in effect provides a subsidy to health care.

Accepted Answer

A) True 
 B)False

Question 19

Supporters of setting a cap on medical malpractice (or "pain and suffering") awards do not argue which of the following?

Accepted Answer

A) The caps will reduce medical malpractice premiums. 
B) They will help reduce health care costs. 
C) Patients should receive full compensation for losses, but should not be made wealthy solely from the awards. 
D) The cap will improve the overall quality of the health care system. 
A) The caps will reduce medical malpractice premiums. 
B) They will help reduce health care costs. 
C) Patients should receive full compensation for losses, but should not be made wealthy solely from the awards. 
D) The cap will improve the overall quality of the health care system.

Question 20

(Last Word) Singapore encourages competition in its health care market by

Accepted Answer

A) requiring hospitals to post prices for services and by government publishing hospital performance records. 
B) avoiding any government involvement in the health care market. 
C) operating government-run hospitals to compete directly with private hospitals. 
D) outsourcing all of its health care services to foreign providers. 
A) requiring hospitals to post prices for services and by government publishing hospital performance records. 
B) avoiding any government involvement in the health care market. 
C) operating government-run hospitals to compete directly with private hospitals. 
D) outsourcing all of its health care services to foreign providers.

Exam 24: Health Care

There is a consensus among economists that the amount of resources allocated to the health care industry is optimal.

(Consider This) Which of the following best explains why hospital charges of $25 per aspirin are not unusual?

The experiences of Singapore, Whole Foods Markets, and the State of Indiana all point to one major factor that could reduce, if not eliminate, overconsumption of health care.And that is

What is the primary purpose of the insurance exchanges set up by the PPACA?

Which factor will tend to increase the demand for health care?

People 65 years old and older constituted about 9 percent of the U.S.population in 1960.In 2014, this percentage was around

Aggregate U.S.health care spending in 2014 was approximately

Preferred provider organizations (PPOs)

The health care industry encompasses the following sectors, except

Which of the following is not a reason why the demand for health care in the U.S.is quite price-inelastic?

The Patient Protection and Affordable Care Act (PPACA) of 2010 is more commonly known as

With an intent to identify potential cost savings (which unfortunately have not materialized), the HITECH Act of 2009 provides $20 billion of subsidies to encourage hospitals and physicians to

Theoretically, the effect of private health insurance on the price and quantity of health care consumed

The Patient Protection and Affordable Care Act (PPACA) attempts to provide health-insurance coverage to low-income people through the following methods, except

The two main types of managed-care organizations are

Rapidly rising U.S.health care costs have

Subsidies for those required to purchase health insurance under the personal mandate provision of the PPACA are

Because employer payments for health insurance are not subject to income or payroll taxes, government in effect provides a subsidy to health care.

Supporters of setting a cap on medical malpractice (or "pain and suffering") awards do not argue which of the following?

(Last Word) Singapore encourages competition in its health care market by

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, and Debt

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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