Question 1

The table shows the hypothetical demand and supply schedule for health care. The efficiency loss caused by the availability of health insurance paying 25 percent of the cost is

Accepted Answer

A) $1,125. 
B) $20,000. 
C) $40,000. 
D) $100. 
A) $1,125. 
B) $20,000. 
C) $40,000. 
D) $100.

Question 2

Refer to the diagram, which shows the market for U.S. health care. Other things equal, which of the following would shift the supply curve for medical care from S₁ to S₂?

Accepted Answer

A) greater reliance on skilled nurses rather than physicians 
B) higher insurance copayments and deductibles 
C) higher physician fees 
D) higher medical malpractice insurance premiums 
A) greater reliance on skilled nurses rather than physicians 
B) higher insurance copayments and deductibles 
C) higher physician fees 
D) higher medical malpractice insurance premiums

Question 3

Which of the following is not a characteristic of health savings accounts (HSAs)?

Accepted Answer

A) They are available to workers covered by health insurance plans with high deductibles ($1,000 or more)and do not have other first-dollar insurance coverage. 
B) Contributions to HSAs are tax-deductible. 
C) Unused funds in HSAs accumulate and remain available for later out-of-pocket medical expenses. 
D) Only workers can contribute to HSAs; employers cannot. 
A) They are available to workers covered by health insurance plans with high deductibles ($1,000 or more)and do not have other first-dollar insurance coverage. 
B) Contributions to HSAs are tax-deductible. 
C) Unused funds in HSAs accumulate and remain available for later out-of-pocket medical expenses. 
D) Only workers can contribute to HSAs; employers cannot.

Question 4

Economists argue that in treating patients,

Accepted Answer

A) physicians should use any test or procedures that might help the patient. 
B) health care should not be rationed by physicians, because it is an entitlement or right. 
C) both benefits and costs should be taken into account by physicians. 
D) physicians should use any test or procedure whose marginal benefit is positive. 
A) physicians should use any test or procedures that might help the patient. 
B) health care should not be rationed by physicians, because it is an entitlement or right. 
C) both benefits and costs should be taken into account by physicians. 
D) physicians should use any test or procedure whose marginal benefit is positive.

Question 5

The following are supply factors in the health care market, except

Accepted Answer

A) number of physicians and nurses. 
B) productivity of health care workers. 
C) medical technology. 
D) health care insurance. 
A) number of physicians and nurses. 
B) productivity of health care workers. 
C) medical technology. 
D) health care insurance.

Question 6

Technological progress in the health care industry has typically reduced costs and increased supply.

Accepted Answer

A) True 
 B)False

Question 7

The Patient Protection and Affordable Care Act (PPACA)bans the previous practice of insurance companies to deny coverage based on preexisting conditions.

Accepted Answer

A) True 
 B)False

Question 8

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 9

Suppose you go to a doctor, but your health insurance plan reimburses you for only 80 percent of the bill. This is an example of

Accepted Answer

A) a copayment. 
B) a deductible. 
C) monopsony power. 
D) a deferred benefit plan. 
A) a copayment. 
B) a deductible. 
C) monopsony power. 
D) a deferred benefit plan.

Question 10

Which of the following is not one of the ways the PPACA attempts to cover the poor?

Accepted Answer

A) requiring larger employers to provide insurance for all of their full-time employees 
B) providing health care directly to the poor through government-run clinics and hospitals 
C) subsidizing the purchase of health insurance for those who buy to comply with the personal mandate 
D) expanding Medicaid to cover anyone with an income less than 133 percent of the poverty level 
A) requiring larger employers to provide insurance for all of their full-time employees 
B) providing health care directly to the poor through government-run clinics and hospitals 
C) subsidizing the purchase of health insurance for those who buy to comply with the personal mandate 
D) expanding Medicaid to cover anyone with an income less than 133 percent of the poverty level

Question 11

Approximately what portion of health care spending in the U.S. in 2017 was paid by the patients (out-of-pocket)?

Accepted Answer

A) 18 percent 
B) 44 percent 
C) 60 percent 
D) 75 percent 
A) 18 percent 
B) 44 percent 
C) 60 percent 
D) 75 percent

Question 12

Defensive medicine

Accepted Answer

A) solves the moral hazard problem. 
B) increases the demand and costs for health care. 
C) solves the principal-agent problem. 
D) is the same as preventive medicine. 
A) solves the moral hazard problem. 
B) increases the demand and costs for health care. 
C) solves the principal-agent problem. 
D) is the same as preventive medicine.

Question 13

In order to help pay for the costs of extending health insurance to previously uninsured people, the PPACA imposes new taxes, including the following, except

Accepted Answer

A) an increase in the Medicare payroll tax for individuals earning more than $200,000 ($250,000 for married couples)per year. 
B) an increase in the capital gains tax for individuals earning more than $200,000 ($250,000 for married couples)per year. 
C) a tax levied on indoor tanning. 
D) a tax on junk foods and soda. 
A) an increase in the Medicare payroll tax for individuals earning more than $200,000 ($250,000 for married couples)per year. 
B) an increase in the capital gains tax for individuals earning more than $200,000 ($250,000 for married couples)per year. 
C) a tax levied on indoor tanning. 
D) a tax on junk foods and soda.

Question 14

The unemployed are disproportionately represented among the uninsured because

Accepted Answer

A) one must be working to qualify for Medicaid. 
B) most workers obtain health insurance through their employers. 
C) most are young and in excellent health, so they choose not to purchase health insurance. 
D) a large percentage of the unemployed are heads of single-parent families. 
A) one must be working to qualify for Medicaid. 
B) most workers obtain health insurance through their employers. 
C) most are young and in excellent health, so they choose not to purchase health insurance. 
D) a large percentage of the unemployed are heads of single-parent families.

Question 15

The federal government in 2006 enacted limits on "pain and suffering" awards on medical malpractice lawsuits against physicians.

Accepted Answer

A) True 
 B)False

Question 16

Refer to the demand and supply diagram, which relates to the health care market. If suppliers provide the quantity of health care demanded and insurance pays one-half of the equilibrium price of the health care good or service depicted, the immediate price to the consumer and the quantity of health care consumed would be best represented by

Accepted Answer

A) P₁ and Q₁. 
B) P₁ and Q₂. 
C) P₂ and Q₂. 
D) P₂ and Q₁. 
A) P₁ and Q₁. 
B) P₁ and Q₂. 
C) P₂ and Q₂. 
D) P₂ and Q₁.

Question 17

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 18

The main focus of the Patient Protection and Affordable Care Act (PPACA)is the provision of health insurance coverage to all Americans.

Accepted Answer

A) True 
 B)False

Question 19

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 20

Refer to the diagram, which shows the market for U.S. health care. The problem of rapidly rising medical care costs is best illustrated by the shifts of the demand and supply curves from D₁ to

Accepted Answer

A) D₂ and S₁ to S₂. 
B) D₂ and S₁ to S₃. 
C) D₃ and S₁ to S₂. 
D) D₃ and S₁ to S₃. 
A) D₂ and S₁ to S₂. 
B) D₂ and S₁ to S₃. 
C) D₃ and S₁ to S₂. 
D) D₃ and S₁ to S₃.

Exam 24: Health Care

The table shows the hypothetical demand and supply schedule for health care. The efficiency loss caused by the availability of health insurance paying 25 percent of the cost is

Refer to the diagram, which shows the market for U.S. health care. Other things equal, which of the following would shift the supply curve for medical care from S₁ to S₂?

Which of the following is not a characteristic of health savings accounts (HSAs)?

Economists argue that in treating patients,

The following are supply factors in the health care market, except

Technological progress in the health care industry has typically reduced costs and increased supply.

The Patient Protection and Affordable Care Act (PPACA)bans the previous practice of insurance companies to deny coverage based on preexisting conditions.

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

Suppose you go to a doctor, but your health insurance plan reimburses you for only 80 percent of the bill. This is an example of

Which of the following is not one of the ways the PPACA attempts to cover the poor?

Approximately what portion of health care spending in the U.S. in 2017 was paid by the patients (out-of-pocket)?

Defensive medicine

In order to help pay for the costs of extending health insurance to previously uninsured people, the PPACA imposes new taxes, including the following, except

The unemployed are disproportionately represented among the uninsured because

The federal government in 2006 enacted limits on "pain and suffering" awards on medical malpractice lawsuits against physicians.

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

The main focus of the Patient Protection and Affordable Care Act (PPACA)is the provision of health insurance coverage to all Americans.

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

Refer to the diagram, which shows the market for U.S. health care. The problem of rapidly rising medical care costs is best illustrated by the shifts of the demand and supply curves from D₁ to

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