Question 1

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

Accepted Answer

A) Pharmaceutical firms and health insurance firms will pay new taxes. 
B) Investors earning more than $200,000 will pay a new tax on their investment income. 
C) Beginning in 2018, all taxes on employer-provided health insurance plans will be reduced or eliminated. 
D) Workers earning more than $200,000 will have their share of the Medicare payroll tax increase. 
A) Pharmaceutical firms and health insurance firms will pay new taxes. 
B) Investors earning more than $200,000 will pay a new tax on their investment income. 
C) Beginning in 2018, all taxes on employer-provided health insurance plans will be reduced or eliminated. 
D) Workers earning more than $200,000 will have their share of the Medicare payroll tax increase.

Question 2

Figure 5-4
   
Figure 5-4 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 5-4.With insurance and a third-party payer system,what is the amount of the deadweight loss?

Accepted Answer

A) $0 
B) $1,500 
C) $3,000 
D) $9,500 
A) $0 
B) $1,500 
C) $3,000 
D) $9,500

Question 3

In the United States,health care spending on people ________ is six times greater than on people ________.

Accepted Answer

A) under age 3; over age 65 
B) aged 18 to 24; 25 to 44 
C) over age 65; aged 18 to 24 
D) over age 65; aged 25 to 44 
A) under age 3; over age 65 
B) aged 18 to 24; 25 to 44 
C) over age 65; aged 18 to 24 
D) over age 65; aged 25 to 44

Question 4

Those who favor changes in the market for health care that would make it more like the markets for other goods and services favor what are generally known as market-based reforms.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following parties is likely to have the most information about the health of an individual who is trying to purchase a health insurance policy?

Accepted Answer

A) the company that issues the health insurance policy 
B) the individual who is applying for the health insurance policy 
C) the employer of the individual who is trying to purchase the health insurance policy 
D) All parties in the health insurance market have access to the same level of information. 
A) the company that issues the health insurance policy 
B) the individual who is applying for the health insurance policy 
C) the employer of the individual who is trying to purchase the health insurance policy 
D) All parties in the health insurance market have access to the same level of information.

Question 6

Health insurance typically pays for most preventive care procedures in all of the following countries except

Accepted Answer

A) Canada. 
B) Japan. 
C) the United Kingdom. 
D) the United States. 
A) Canada. 
B) Japan. 
C) the United Kingdom. 
D) the United States.

Question 7

________ occurs when actions taken by one party to a transaction are different from what the other party expected at the time of the transaction.

Accepted Answer

A) Adverse selection 
B) Risk aversion 
C) Fraud 
D) Moral hazard 
A) Adverse selection 
B) Risk aversion 
C) Fraud 
D) Moral hazard

Question 8

In the United States,health care spending on people over age 65 is ________ on people aged 18 to 24.

Accepted Answer

A) one third as much as 
B) twice as much as 
C) six times greater than 
D) forty times greater than 
A) one third as much as 
B) twice as much as 
C) six times greater than 
D) forty times greater than

Question 9

Substantial co-payments are typically not required as a part of the health care system in

Accepted Answer

A) Canada and the United Kingdom. 
B) Japan and Canada. 
C) the United States and Japan. 
D) Japan and the United Kingdom. 
A) Canada and the United Kingdom. 
B) Japan and Canada. 
C) the United States and Japan. 
D) Japan and the United Kingdom.

Question 10

Between 1981 and 2011,deaths from kidney disease increased largely due to the effects of

Accepted Answer

A) increasing obesity. 
B) increasing alcohol consumption. 
C) increased smoking. 
D) increased pollution. 
A) increasing obesity. 
B) increasing alcohol consumption. 
C) increased smoking. 
D) increased pollution.

Question 11

If a hospital knows that an insurance company will pay for most of a patient's bill,the hospital has more of an incentive to require additional medical procedures and tests,even if the patient may not require them.This is an example of

Accepted Answer

A) moral hazard. 
B) the principle-agent problem. 
C) asymmetric information. 
D) adverse selection. 
A) moral hazard. 
B) the principle-agent problem. 
C) asymmetric information. 
D) adverse selection.

Question 12

Economists who support market-based reforms for health care believe that increased competition among providers of health care would ________ costs and ________ economic efficiency.

Accepted Answer

A) increase; increase 
B) increase; decrease 
C) decrease; increase 
D) decrease; decrease 
A) increase; increase 
B) increase; decrease 
C) decrease; increase 
D) decrease; decrease

Question 13

Suppose you see a 2006 Scion xB Sport Wagon advertised in the local newspaper for $8,500.If you knew the car was reliable,you would be willing to pay $10,000 for it.If you knew the car was unreliable,you would only be willing to pay $5,500 for it.Under what circumstances should you buy the car?

Accepted Answer

Because of the lemons problem you should

Question 14

Two consequences of asymmetric information are adverse selection and moral hazard.An important distinction between the two is

Accepted Answer

A) adverse selection exists prior to the completion of a transaction while moral hazard occurs after the transaction is completed. 
B) moral hazard exists prior to the completion of a transaction while adverse selection occurs after the transaction is completed. 
C) adverse selection leads to an inefficient quantity while moral hazard leads to an efficient quantity. 
D) moral hazard leads to an inefficient quantity while adverse selection leads to an efficient quantity. 
A) adverse selection exists prior to the completion of a transaction while moral hazard occurs after the transaction is completed. 
B) moral hazard exists prior to the completion of a transaction while adverse selection occurs after the transaction is completed. 
C) adverse selection leads to an inefficient quantity while moral hazard leads to an efficient quantity. 
D) moral hazard leads to an inefficient quantity while adverse selection leads to an efficient quantity.

Question 15

The largest government-run health care system in the world,with 1.7 million employees,is in

Accepted Answer

A) Canada. 
B) Japan. 
C) the United Kingdom. 
D) the United States. 
A) Canada. 
B) Japan. 
C) the United Kingdom. 
D) the United States.

Question 16

Suppose that in a market for used cars,there are good used cars and bad used cars (lemons).Consumers are willing to pay as much as $6,000 for a good used car but only $1,000 for a lemon.Sellers of good used cars value their cars at $5,000 each and sellers of lemons value their cars at $800 each.Buyers cannot tell if a used car is reliable or is a lemon.Based on this information,what is the likely outcome in the market for used cars?

Accepted Answer

A) Both good used cars and lemons will sell for $4,500 each. 
B) Only lemons will sell, for $800 each. 
C) Both good used cars and lemons will sell for $1,000 each. 
D) Most used cars offered for sale will be lemons. 
A) Both good used cars and lemons will sell for $4,500 each. 
B) Only lemons will sell, for $800 each. 
C) Both good used cars and lemons will sell for $1,000 each. 
D) Most used cars offered for sale will be lemons.

Question 17

By the year 2019,health care's share of gross domestic product in the United States is projected to

Accepted Answer

A) return to its 1995 level. 
B) have declined to only 6.5 percent. 
C) be more than three times as high as it was in 1965. 
D) reach a level of 75 percent. 
A) return to its 1995 level. 
B) have declined to only 6.5 percent. 
C) be more than three times as high as it was in 1965. 
D) reach a level of 75 percent.

Question 18

Of the following high-income countries,which has the lowest life expectancy at birth?

Accepted Answer

A) Canada 
B) Japan 
C) the United Kingdom 
D) the United States 
A) Canada 
B) Japan 
C) the United Kingdom 
D) the United States

Question 19

In the United States in 2012,the percentage of people without any form of health insurance was about

Accepted Answer

A) 16%. 
B) 29%. 
C) 64%. 
D) 83%. 
A) 16%. 
B) 29%. 
C) 64%. 
D) 83%.

Question 20

Under current tax law individuals do not pay taxes on health insurance benefits they receive from their employers.As a result

Accepted Answer

A) the federal government spends more than it receives in tax revenue. 
B) individuals are encouraged to want generous health coverage that reduces their incentives to cut costs. 
C) the quality of health care provided is less than it would be if benefits were taxed. 
D) politicians are encouraged to raise income and payroll taxes. 
A) the federal government spends more than it receives in tax revenue. 
B) individuals are encouraged to want generous health coverage that reduces their incentives to cut costs. 
C) the quality of health care provided is less than it would be if benefits were taxed. 
D) politicians are encouraged to raise income and payroll taxes.

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

Figure 5-4 Figure 5-4 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 5-4.With insurance and a third-party payer system,what is the amount of the deadweight loss?

In the United States,health care spending on people is six times greater than on people .

Those who favor changes in the market for health care that would make it more like the markets for other goods and services favor what are generally known as market-based reforms.

Which of the following parties is likely to have the most information about the health of an individual who is trying to purchase a health insurance policy?

Health insurance typically pays for most preventive care procedures in all of the following countries except

________ occurs when actions taken by one party to a transaction are different from what the other party expected at the time of the transaction.

In the United States,health care spending on people over age 65 is ________ on people aged 18 to 24.

Substantial co-payments are typically not required as a part of the health care system in

Between 1981 and 2011,deaths from kidney disease increased largely due to the effects of

If a hospital knows that an insurance company will pay for most of a patient's bill,the hospital has more of an incentive to require additional medical procedures and tests,even if the patient may not require them.This is an example of

Economists who support market-based reforms for health care believe that increased competition among providers of health care would costs and economic efficiency.

Suppose you see a 2006 Scion xB Sport Wagon advertised in the local newspaper for $8,500.If you knew the car was reliable,you would be willing to pay $10,000 for it.If you knew the car was unreliable,you would only be willing to pay $5,500 for it.Under what circumstances should you buy the car?

Two consequences of asymmetric information are adverse selection and moral hazard.An important distinction between the two is

The largest government-run health care system in the world,with 1.7 million employees,is in

By the year 2019,health care's share of gross domestic product in the United States is projected to

Of the following high-income countries,which has the lowest life expectancy at birth?

In the United States in 2012,the percentage of people without any form of health insurance was about

Under current tax law individuals do not pay taxes on health insurance benefits they receive from their employers.As a result

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

Exam 5: The Economics of Health Care

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

Figure 5-4 Figure 5-4 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 5-4.With insurance and a third-party payer system,what is the amount of the deadweight loss?

In the United States,health care spending on people ________ is six times greater than on people ________.

Those who favor changes in the market for health care that would make it more like the markets for other goods and services favor what are generally known as market-based reforms.

Which of the following parties is likely to have the most information about the health of an individual who is trying to purchase a health insurance policy?

Health insurance typically pays for most preventive care procedures in all of the following countries except

________ occurs when actions taken by one party to a transaction are different from what the other party expected at the time of the transaction.

In the United States,health care spending on people over age 65 is ________ on people aged 18 to 24.

Substantial co-payments are typically not required as a part of the health care system in

Between 1981 and 2011,deaths from kidney disease increased largely due to the effects of

If a hospital knows that an insurance company will pay for most of a patient's bill,the hospital has more of an incentive to require additional medical procedures and tests,even if the patient may not require them.This is an example of

Economists who support market-based reforms for health care believe that increased competition among providers of health care would ________ costs and ________ economic efficiency.

Suppose you see a 2006 Scion xB Sport Wagon advertised in the local newspaper for $8,500.If you knew the car was reliable,you would be willing to pay $10,000 for it.If you knew the car was unreliable,you would only be willing to pay $5,500 for it.Under what circumstances should you buy the car?

Two consequences of asymmetric information are adverse selection and moral hazard.An important distinction between the two is

The largest government-run health care system in the world,with 1.7 million employees,is in

By the year 2019,health care's share of gross domestic product in the United States is projected to

Of the following high-income countries,which has the lowest life expectancy at birth?

In the United States in 2012,the percentage of people without any form of health insurance was about

Under current tax law individuals do not pay taxes on health insurance benefits they receive from their employers.As a result

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage, international Trade, and Exchange Rates

Filters

In the United States,health care spending on people is six times greater than on people .

Economists who support market-based reforms for health care believe that increased competition among providers of health care would costs and economic efficiency.