Question 1

The moral hazard problem created by health insurance induces consumers to underconsume health care.

Accepted Answer

A) True 
 B)False

Question 2

If an individual is less careful about avoiding accidents or illness because she has health insurance, this is an example of

Accepted Answer

A) the free-rider problem. 
B) the moral hazard problem. 
C) the adverse selection problem. 
D) the Coase theorem. 
A) the free-rider problem. 
B) the moral hazard problem. 
C) the adverse selection problem. 
D) the Coase theorem.

Question 3

Federal tax policy

Accepted Answer

A) treats employer health insurance premiums as taxable income. 
B) subsidizes health insurance and thereby increases the demand for health care. 
C) subsidizes health insurance and thereby decreases the demand for health care. 
D) corrects the overallocation of resources to the health care industry that would otherwise exist. 
A) treats employer health insurance premiums as taxable income. 
B) subsidizes health insurance and thereby increases the demand for health care. 
C) subsidizes health insurance and thereby decreases the demand for health care. 
D) corrects the overallocation of resources to the health care industry that would otherwise exist.

Question 4

Major criticisms against the Patient Protection and Affordable Care Act (PPACA) do not include which of the following arguments?

Accepted Answer

A) It will lead to greater inefficiencies in health care, and overconsumption might even increase. 
B) It is very costly, and the revenue sources cited in the act will not be sufficient to cover future expenses. 
C) It still does not cover everyone in the nation, and there will still be significant numbers of Americans left uninsured. 
D) It might be the first step toward a socialized health insurance system where market forces will have no role in rationing health care. 
A) It will lead to greater inefficiencies in health care, and overconsumption might even increase. 
B) It is very costly, and the revenue sources cited in the act will not be sufficient to cover future expenses. 
C) It still does not cover everyone in the nation, and there will still be significant numbers of Americans left uninsured. 
D) It might be the first step toward a socialized health insurance system where market forces will have no role in rationing health care.

Question 5

Some low-income workers are not covered by Medicaid because of the income that they are earning from their jobs.

Accepted Answer

A) True 
 B)False

Question 6

If labor productivity in the health care industry rises very slowly relative to wages and salaries in the industry, this would tend to

Accepted Answer

A) increase the demand for health care. 
B) decrease the demand for health care. 
C) increase the supply of health care. 
D) increase the cost of health care. 
A) increase the demand for health care. 
B) decrease the demand for health care. 
C) increase the supply of health care. 
D) increase the cost of health care.

Question 7

The rising prices, quantities, and costs of health care in the U.S.are the result of

Accepted Answer

A) demand for health care increasing faster than supply. 
B) supply of health care decreasing. 
C) supply of health care decreasing faster than demand. 
D) supply of health care decreasing coupled with demand increasing. 
A) demand for health care increasing faster than supply. 
B) supply of health care decreasing. 
C) supply of health care decreasing faster than demand. 
D) supply of health care decreasing coupled with demand increasing.

Question 8

Most industrialized countries emphasize private health insurance paid by employers, to provide coverage for most workers in each nation.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following was not an objection raised by opponents of the Patient Protection and Affordable Care Act?

Accepted Answer

A) The revenue generated by the new taxes in the PPACA would be insufficient to cover costs of the program. 
B) The PPACA moves the United States closer to creating a national health insurance system with nonprice rationing of health care. 
C) The subsidies would lead to higher prices and increased consumption of health care. 
D) The percentage of health care spending coming directly out of consumers' pockets would increase. 
A) The revenue generated by the new taxes in the PPACA would be insufficient to cover costs of the program. 
B) The PPACA moves the United States closer to creating a national health insurance system with nonprice rationing of health care. 
C) The subsidies would lead to higher prices and increased consumption of health care. 
D) The percentage of health care spending coming directly out of consumers' pockets would increase.

Question 10

About three-fourths of all health care costs are paid out of pocket by patients.Topic: Limited Access
Topic: The Health Care Industry

Accepted Answer

A) True 
 B)False

Question 11

The table shows the hypothetical demand and supply schedule for health care.With insurance paying two-thirds of the cost of health care, there would be a resulting allocative

Accepted Answer

A) efficiency because, at 500 units, the marginal cost to society of $400 equals the marginal benefit of $400. 
B) efficiency because, at 700 units, the marginal cost to society is $200 and the marginal benefit is $600. 
C) inefficiency because, at 700 units, the marginal cost to society is $600 and the marginal benefit is $200. 
D) inefficiency because, at 700 units, the marginal cost to society is $400 and the marginal benefit is $200. 
A) efficiency because, at 500 units, the marginal cost to society of $400 equals the marginal benefit of $400. 
B) efficiency because, at 700 units, the marginal cost to society is $200 and the marginal benefit is $600. 
C) inefficiency because, at 700 units, the marginal cost to society is $600 and the marginal benefit is $200. 
D) inefficiency because, at 700 units, the marginal cost to society is $400 and the marginal benefit is $200.

Question 12

Health care costs have greatly increased in recent years in the United States.This fact alone does not establish an overallocation of resources to health care, because

Accepted Answer

A) the benefits of health care have also greatly increased in recent years. 
B) rising medical care prices have inflated health care costs. 
C) the marginal cost of health care exceeds the average total cost of health care. 
D) negative externalities sometimes result from additional health care spending. 
A) the benefits of health care have also greatly increased in recent years. 
B) rising medical care prices have inflated health care costs. 
C) the marginal cost of health care exceeds the average total cost of health care. 
D) negative externalities sometimes result from additional health care spending.

Question 13

Attempts to alter incentives and contain health care costs include the following, except

Accepted Answer

A) imposing a copayment or a deductible. 
B) adopting managed-care systems, such as PPOs and HMOs. 
C) universal coverage. 
D) diagnosis-related groups (DRGs) of Medicare. 
A) imposing a copayment or a deductible. 
B) adopting managed-care systems, such as PPOs and HMOs. 
C) universal coverage. 
D) diagnosis-related groups (DRGs) of Medicare.

Question 14

(Consider This) Which of the following was a major objective of the Health Information Technology for Economic and Clinical Health Act?

Accepted Answer

A) more accurate records so health care providers could increase billings 
B) equip all households with personal medical devices to send real-time health symptoms to health care providers 
C) identify potential cost savings by detecting excessive procedures and medications 
D) all of these 
A) more accurate records so health care providers could increase billings 
B) equip all households with personal medical devices to send real-time health symptoms to health care providers 
C) identify potential cost savings by detecting excessive procedures and medications 
D) all of these

Question 15

The availability of health insurance tends to

Accepted Answer

A) decrease the quantity of health care demanded and cause an underallocation of resources to the health care industry. 
B) increase the quantity of health care demanded and cause an underallocation of resources to the health care industry. 
C) increase the quantity of health care demanded and cause an overallocation of resources to the health care industry. 
D) decrease the quantity of health care demanded and cause an overallocation of resources to the health care industry. 
A) decrease the quantity of health care demanded and cause an underallocation of resources to the health care industry. 
B) increase the quantity of health care demanded and cause an underallocation of resources to the health care industry. 
C) increase the quantity of health care demanded and cause an overallocation of resources to the health care industry. 
D) decrease the quantity of health care demanded and cause an overallocation of resources to the health care industry.

Question 16

The price elasticity of demand for health care is

Accepted Answer

A) perfectly inelastic. 
B) relatively inelastic. 
C) relatively elastic. 
D) perfectly elastic. 
A) perfectly inelastic. 
B) relatively inelastic. 
C) relatively elastic. 
D) perfectly elastic.

Question 17

When the supplier, not the buyer, of health care services makes most of the decisions about the amount and type of health care to be provided, there is

Accepted Answer

A) a moral hazard in the health care market. 
B) asymmetric information in the health care market. 
C) a lack of medical ethics in the health care market. 
D) a need for Medicare in the health care market. 
A) a moral hazard in the health care market. 
B) asymmetric information in the health care market. 
C) a lack of medical ethics in the health care market. 
D) a need for Medicare in the health care market.

Question 18

About how many people were employed in the U.S.health care industry in 2014?

Accepted Answer

A) 5 million 
B) 12 million 
C) 34 million 
D) 42 million 
A) 5 million 
B) 12 million 
C) 34 million 
D) 42 million

Question 19

What was the primary goal of the proponents of the Patient Protection and Affordable Care Act?

Accepted Answer

A) improve the quality of care by reducing medical malpractice 
B) reduce health care costs in the United States by 50 percent 
C) make all U.S.health care publically (government) provided 
D) extend health insurance coverage to all Americans 
A) improve the quality of care by reducing medical malpractice 
B) reduce health care costs in the United States by 50 percent 
C) make all U.S.health care publically (government) provided 
D) extend health insurance coverage to all Americans

Question 20

Insurance companies use deductibles and copayments to control increases in the amount of health care demanded.

Accepted Answer

A) True 
 B)False

Exam 24: Health Care

The moral hazard problem created by health insurance induces consumers to underconsume health care.

If an individual is less careful about avoiding accidents or illness because she has health insurance, this is an example of

Federal tax policy

Major criticisms against the Patient Protection and Affordable Care Act (PPACA) do not include which of the following arguments?

Some low-income workers are not covered by Medicaid because of the income that they are earning from their jobs.

If labor productivity in the health care industry rises very slowly relative to wages and salaries in the industry, this would tend to

The rising prices, quantities, and costs of health care in the U.S.are the result of

Most industrialized countries emphasize private health insurance paid by employers, to provide coverage for most workers in each nation.

Which of the following was not an objection raised by opponents of the Patient Protection and Affordable Care Act?

About three-fourths of all health care costs are paid out of pocket by patients.Topic: Limited Access Topic: The Health Care Industry

The table shows the hypothetical demand and supply schedule for health care.With insurance paying two-thirds of the cost of health care, there would be a resulting allocative

Health care costs have greatly increased in recent years in the United States.This fact alone does not establish an overallocation of resources to health care, because

Attempts to alter incentives and contain health care costs include the following, except

(Consider This) Which of the following was a major objective of the Health Information Technology for Economic and Clinical Health Act?

The availability of health insurance tends to

The price elasticity of demand for health care is

When the supplier, not the buyer, of health care services makes most of the decisions about the amount and type of health care to be provided, there is

About how many people were employed in the U.S.health care industry in 2014?

What was the primary goal of the proponents of the Patient Protection and Affordable Care Act?

Insurance companies use deductibles and copayments to control increases in the amount of health care demanded.

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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