Question 1

An increase in the demand for health care would most likely result from

Accepted Answer

A) healthier lifestyles. 
B) an aging population. 
C) less health insurance coverage. 
D) increased productivity in health care. 
A) healthier lifestyles. 
B) an aging population. 
C) less health insurance coverage. 
D) increased productivity in health care.

Question 2

The health care market is characterized by

Accepted Answer

A) extensive negative externalities. 
B) significant positive externalities. 
C) perfect knowledge by both buyers and sellers. 
D) a perfectly inelastic demand. 
A) extensive negative externalities. 
B) significant positive externalities. 
C) perfect knowledge by both buyers and sellers. 
D) a perfectly inelastic demand.

Question 3

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 4

Refer to the graph for the health care market. A health insurance plan that pays four-fifths of the cost of a consumer's health care leads to

Accepted Answer

A) overconsumption of health care by 300 units. 
B) overconsumption of health care by 600 units. 
C) overconsumption of health care by 150 units. 
D) a socially efficient consumption level of health care. 
A) overconsumption of health care by 300 units. 
B) overconsumption of health care by 600 units. 
C) overconsumption of health care by 150 units. 
D) a socially efficient consumption level of health care.

Question 5

Which of the following factors has contributed to rising health care prices in the United States?

Accepted Answer

A) The supply of physicians per 100,000 people has decreased since 1975. 
B) Productivity growth in the health care industry has been negative in recent years. 
C) Improvements in medical technology have significantly increased the number of patients that can be treated each year. 
D) The supply of physicians per 100,000 people has risen since 1975, but not as fast as the increase in the demand for physicians' services. 
A) The supply of physicians per 100,000 people has decreased since 1975. 
B) Productivity growth in the health care industry has been negative in recent years. 
C) Improvements in medical technology have significantly increased the number of patients that can be treated each year. 
D) The supply of physicians per 100,000 people has risen since 1975, but not as fast as the increase in the demand for physicians' services.

Question 6

Health maintenance organizations (HMOs)are like health clubs that operate facilities where people can exercise and get physical training.

Accepted Answer

A) True 
 B)False

Question 7

Employers in the U.S. started offering health insurance as a fringe benefit to their employees during World War II as a way of getting around the wage controls that were in effect then.

Accepted Answer

A) True 
 B)False

Question 8

Rising health care costs have contributed to slower growth in real wages of workers.

Accepted Answer

A) True 
 B)False

Question 9

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 10

Describe the major spending categories and percentage for health care spending.

Accepted Answer

Total U.S. health care expenditures cons

Question 11

Studies in industrially advanced nations indicate that a 3 percent increase in incomes will generate a

Accepted Answer

A) 1 percent increase in the amount of health care demanded. 
B) 1.5 percent increase in the amount of health care demanded. 
C) 3 percent increase in the amount of health care demanded. 
D) 6 percent increase in the amount of health care demanded. 
A) 1 percent increase in the amount of health care demanded. 
B) 1.5 percent increase in the amount of health care demanded. 
C) 3 percent increase in the amount of health care demanded. 
D) 6 percent increase in the amount of health care demanded.

Question 12

A moral hazard problem arises in the health care market because health insurance encourages people to overconsume health care.

Accepted Answer

A) True 
 B)False

Question 13

A health care organization that contracts with employers to provide health insurance to their workers, and hires doctors and other groups to provide health care for the workers who are insured is a

Accepted Answer

A) preferred provider organization. 
B) health maintenance organization. 
C) diagnosis-related group system. 
D) regional health alliance. 
A) preferred provider organization. 
B) health maintenance organization. 
C) diagnosis-related group system. 
D) regional health alliance.

Question 14

The table gives supply and demand data for a certain elective surgical procedure. If suppliers provide the quantity of health care demanded and insurance pays one-third of the equilibrium price, there would be a resulting allocative

Accepted Answer

A) efficiency because, at 7,000 units, the marginal cost to society of $3,000 equals the marginal benefit of $3,000. 
B) efficiency because, at 12,000 units, the marginal cost to society is $4,000 and the marginal benefit is $1,000. 
C) inefficiency because, at 12,000 units, the marginal cost to society is $5,000 and the marginal benefit is $2,000. 
D) inefficiency because, at 12,000 units, the marginal cost to society is $2,000 and the marginal benefit is $5,000. 
A) efficiency because, at 7,000 units, the marginal cost to society of $3,000 equals the marginal benefit of $3,000. 
B) efficiency because, at 12,000 units, the marginal cost to society is $4,000 and the marginal benefit is $1,000. 
C) inefficiency because, at 12,000 units, the marginal cost to society is $5,000 and the marginal benefit is $2,000. 
D) inefficiency because, at 12,000 units, the marginal cost to society is $2,000 and the marginal benefit is $5,000.

Question 15

The increasing use of part-time and temporary workers can partly be blamed on the rising health care costs to employers.

Accepted Answer

A) True 
 B)False

Question 16

The price elasticity of demand for health care is such that an increase in the price of health care will

Accepted Answer

A) decrease total health care expenditures. 
B) increase total health care expenditures. 
C) shift the demand for health care rightward. 
D) shift the demand for health care leftward. 
A) decrease total health care expenditures. 
B) increase total health care expenditures. 
C) shift the demand for health care rightward. 
D) shift the demand for health care leftward.

Question 17

The table shows the hypothetical demand and supply schedule for health care. If private insurance covers 50 percent of the equilibrium price, how much will the insured pay and what will be their quantity of health care demanded?

Accepted Answer

A) $400 and 500 units. 
B) $400 and 400 units. 
C) $500 and 400 units. 
D) $200 and 700 units. 
A) $400 and 500 units. 
B) $400 and 400 units. 
C) $500 and 400 units. 
D) $200 and 700 units.

Question 18

Describe the extent and characteristics of the part of the population with limited access to health care coverage.

Accepted Answer

In 2017, about 9 percent of the populati

Question 19

Describe the costs involved when the uninsured go to the emergency room.

Accepted Answer

The uninsured may wait until their illne

Question 20

Which of the following terms best characterizes the demand for health care?

Accepted Answer

A) price elastic 
B) price inelastic 
C) income inelastic 
D) negative cross elasticity 
A) price elastic 
B) price inelastic 
C) income inelastic 
D) negative cross elasticity

Exam 24: Health Care

An increase in the demand for health care would most likely result from

The health care market is characterized by

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

Refer to the graph for the health care market. A health insurance plan that pays four-fifths of the cost of a consumer's health care leads to

Which of the following factors has contributed to rising health care prices in the United States?

Health maintenance organizations (HMOs)are like health clubs that operate facilities where people can exercise and get physical training.

Employers in the U.S. started offering health insurance as a fringe benefit to their employees during World War II as a way of getting around the wage controls that were in effect then.

Rising health care costs have contributed to slower growth in real wages of workers.

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

Describe the major spending categories and percentage for health care spending.

Studies in industrially advanced nations indicate that a 3 percent increase in incomes will generate a

A moral hazard problem arises in the health care market because health insurance encourages people to overconsume health care.

A health care organization that contracts with employers to provide health insurance to their workers, and hires doctors and other groups to provide health care for the workers who are insured is a

The table gives supply and demand data for a certain elective surgical procedure. If suppliers provide the quantity of health care demanded and insurance pays one-third of the equilibrium price, there would be a resulting allocative

The increasing use of part-time and temporary workers can partly be blamed on the rising health care costs to employers.

The price elasticity of demand for health care is such that an increase in the price of health care will

The table shows the hypothetical demand and supply schedule for health care. If private insurance covers 50 percent of the equilibrium price, how much will the insured pay and what will be their quantity of health care demanded?

Describe the extent and characteristics of the part of the population with limited access to health care coverage.

Describe the costs involved when the uninsured go to the emergency room.

Which of the following terms best characterizes the demand for health care?

Limits, Alternatives, and Choices

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Demand, Supply, and Market Equilibrium

Market Failures Caused by Externalities Asymmetric Information

Public Goods, Public Choice, 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

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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

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Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Immigration

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The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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