Exam 5: The Economics of Health Care

Consider a used car market in which half the cars are good and half are bad (lemons).A rational buyer in this market should

Two key consequences of asymmetric information are adverse selection and moral hazard.Define each concept,provide one example of each and explain how the two concepts differ.

Figure 5-5 Figure 5-5 represents the market for medical services with and without insurance, and the effect of a third-party payer system on the demand for medical services. -Refer to Figure 5-5.The efficient price of medical services is

Economists refer to the actions people take after they have entered into a transaction that makes the other party to the transaction worse off as

In the United States,consumers usually pay ________ than the true cost of medical treatment because of ________.

The United Kingdom has a health care system under which the government owns most of the hospitals and employs most of the doctors.

Vaccinating people against a communicable disease such as influenza not only reduces the chances that the person vaccinated will catch the disease but also reduces the probability that an epidemic of the disease will occur.Which of the following statements is true?

When people who buy insurance change their behavior after the purchase because they are protected from loss by the insurance,the insurance market is said to face the problem of

The difference between adverse selection and moral hazard is that

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.

Because consumers who have insurance provided by their employers usually only pay a deductible for a visit to the doctor's office

The largest government-run health care system in the world,with 1.7 million employees,is the National Health Service (NHS)in the United Kingdom.The NHS receives its funding primarily from

The overall mortality rate in the United States has declined for the past 30 years.

Which of the following is not part of the "state health exchanges" provision of the Patient Protection and Affordable Care Act (ACA)?

A key difficulty facing insurance companies is that people know more about their health than do insurance companies,and that those people who are seriously ill are the most likely to want to obtain health insurance.What is this phenomenon called?

Consider a used car market in which half the cars are good and half are bad (lemons).If buyers are rational,the prices being offered for used cars will result in

Economists John Cogan,Glenn Hubbard,and Daniel Kessler have estimated that ________ the tax preference for employer-provided health insurance would reduce spending by people enrolled in these programs by 33 percent.

Moral hazard refers to the actions people take after they have entered into a transaction that make the other party to the transaction worse off.

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

By 2013,spending on federal health care programs such as Medicare and Medicaid had grown to 6 percent of GDP.