Question 1

Compared to other high-income countries, health care spending per person in the United States has been

Accepted Answer

A) growing at a faster rate. 
B) declining at a faster rate. 
C) growing at approximately the same rate. 
D) declining at approximately the same rate. 
A) growing at a faster rate. 
B) declining at a faster rate. 
C) growing at approximately the same rate. 
D) declining at approximately the same rate.

Question 2

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.

Accepted Answer

A) True 
 B)False

Question 3

Basic supply and demand analysis indicates that having firms rather than the government provide health insurance to workers

Accepted Answer

A) changes both the composition of the compensation that firms pay and its level. 
B) changes the composition of the compensation that firms pay, but does not change its level. 
C) does not change the composition of the compensation that firms pay, but does change its level. 
D) changes neither the composition of the compensation that firms pay nor its level. 
A) changes both the composition of the compensation that firms pay and its level. 
B) changes the composition of the compensation that firms pay, but does not change its level. 
C) does not change the composition of the compensation that firms pay, but does change its level. 
D) changes neither the composition of the compensation that firms pay nor its level.

Question 4

An insurance company is likely to attract customers like Clancy who want to purchase insurance because he knows better that the company that he is more likely to make a claim on a policy.What is the term used to describe the situation above?

Accepted Answer

A) moral hazard 
B) adverse selection 
C) asymmetric information 
D) economic irrationality 
A) moral hazard 
B) adverse selection 
C) asymmetric information 
D) economic irrationality

Question 5

Health insurance companies impose deductibles on policies and co-payments on claims

Accepted Answer

A) to increase sales. 
B) to reduce moral hazard problems. 
C) to reduces sunk costs. 
D) to increase prices. 
A) to increase sales. 
B) to reduce moral hazard problems. 
C) to reduces sunk costs. 
D) to increase prices.

Question 6

Briefly explain 4 of the difficulties in making cross-country comparisons in health care outcomes.

Accepted Answer

Data problems: Countries do not always c

Question 7

In 2015, health care's share of gross domestic product in the United States

Accepted Answer

A) had returned to its 1995 level. 
B) had declined to only 6.5 percent. 
C) was almost than three times as high as it was in 1965. 
D) reached a level of 75 percent. 
A) had returned to its 1995 level. 
B) had declined to only 6.5 percent. 
C) was almost than three times as high as it was in 1965. 
D) reached a level of 75 percent.

Question 8

The Congressional Budget Office estimates that the payments to settle malpractice lawsuits and the premiums doctors pay for malpractice insurance account for ________ of health care costs in the United States.

Accepted Answer

A) between 20 and 30 percent 
B) roughly half 
C) less than 1 percent 
D) a vast majority 
A) between 20 and 30 percent 
B) roughly half 
C) less than 1 percent 
D) a vast majority

Question 9

Why might a young, healthy person choose not to buy health insurance?

Accepted Answer

if you are healthy and rarely

Question 10

Figure 7-1
   
Figure 7-1 represents the market for vaccinations.Vaccinations are considered a benefit to society, and the figure shows both the marginal private benefit and the marginal social benefit from vaccinations.
-Refer to Figure 7-1.Marginal social benefit is represented by which curve?

Accepted Answer

A) D₁ 
B) D₂ 
C) Supply 
D) All of the above represent marginal social benefit. 
A) D₁ 
B) D₂ 
C) Supply 
D) All of the above represent marginal social benefit.

Question 11

What has happened to health care's share of gross domestic product in the United States since 1965? How does this compare to what has happened to out-of-pocket spending on health care as a percentage of all spending on health care?

Accepted Answer

Health care's share of gross domestic pr

Question 12

Which of the following is a part of the "employer mandate" provision of the Patient Protection and Affordable Care Act (ACA)?

Accepted Answer

A) Every firm with more than 3 full-time employees must offer health insurance to its employees and must automatically enroll them in the plan. 
B) Small businesses with fewer than 50 employees are exempt from being required to participate in the program. 
C) Firms with 50 or more full-time employees must offer health insurance or pay a $3,000 fine to the federal government for every employee who receives a tax credit from the federal government for obtaining health insurance through a health insurance marketplace. 
D) Every resident of the United States must have health insurance that meets certain basic requirements. 
A) Every firm with more than 3 full-time employees must offer health insurance to its employees and must automatically enroll them in the plan. 
B) Small businesses with fewer than 50 employees are exempt from being required to participate in the program. 
C) Firms with 50 or more full-time employees must offer health insurance or pay a $3,000 fine to the federal government for every employee who receives a tax credit from the federal government for obtaining health insurance through a health insurance marketplace. 
D) Every resident of the United States must have health insurance that meets certain basic requirements.

Question 13

In the United States in 2014, over 90 percent of people without health insurance were below the age of 35.

Accepted Answer

A) True 
 B)False

Question 14

Figure 7-2
   
Figure 7-2 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 7-2.If consumers paid the full price of medical services, the price they would pay is

Accepted Answer

A) $25. 
B) $40. 
C) $55. 
D) >$55. 
A) $25. 
B) $40. 
C) $55. 
D) >$55.

Question 15

Vaccinations tend to result in a positive externality.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not an advantage of risk pooling?

Accepted Answer

A) By insuring large groups as opposed to individuals, health insurance providers reduce adverse selection. 
B) It gives very sick people in the group the same access to health care and to pay the same premiums as healthy individuals. 
C) It is easier for an insurance company to estimate the average number of claims likely to be filed under a group policy than it is to predict the number of claims likely to be filed under an individual policy. 
D) Individuals who are insured and therefore do not have to pay the full cost of health care services may be inclined to over-use those services. 
A) By insuring large groups as opposed to individuals, health insurance providers reduce adverse selection. 
B) It gives very sick people in the group the same access to health care and to pay the same premiums as healthy individuals. 
C) It is easier for an insurance company to estimate the average number of claims likely to be filed under a group policy than it is to predict the number of claims likely to be filed under an individual policy. 
D) Individuals who are insured and therefore do not have to pay the full cost of health care services may be inclined to over-use those services.

Question 17

In the United States in 2014, the percentage of people with private health insurance was about

Accepted Answer

A) 17%. 
B) 29%. 
C) 74%. 
D) 83%. 
A) 17%. 
B) 29%. 
C) 74%. 
D) 83%.

Question 18

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

Accepted Answer

A) offer to pay a price equal to the most she would pay for a good car. 
B) offer to pay a price equal to the most she would pay for a lemon. 
C) offer to pay a price somewhere between the price she would pay for a good car and the price she would pay for a lemon. 
D) save up and buy a new car. 
A) offer to pay a price equal to the most she would pay for a good car. 
B) offer to pay a price equal to the most she would pay for a lemon. 
C) offer to pay a price somewhere between the price she would pay for a good car and the price she would pay for a lemon. 
D) save up and buy a new car.

Question 19

Under the Patient Protection and Affordable Care Act (ACA), insurance companies will be required to participate in a high-risk pool that will cover individuals with pre-existing medical conditions.

Accepted Answer

A) True 
 B)False

Question 20

Between 1981 and 2013, the overall mortality rate in the United States

Accepted Answer

A) decreased by more than 25 percent. 
B) slowly but steadily increased. 
C) remained fairly constant. 
D) was similar to the average rate in most low-income countries. 
A) decreased by more than 25 percent. 
B) slowly but steadily increased. 
C) remained fairly constant. 
D) was similar to the average rate in most low-income countries.

Compared to other high-income countries, health care spending per person in the United States has been

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.

Basic supply and demand analysis indicates that having firms rather than the government provide health insurance to workers

An insurance company is likely to attract customers like Clancy who want to purchase insurance because he knows better that the company that he is more likely to make a claim on a policy.What is the term used to describe the situation above?

Health insurance companies impose deductibles on policies and co-payments on claims

Briefly explain 4 of the difficulties in making cross-country comparisons in health care outcomes.

In 2015, health care's share of gross domestic product in the United States

The Congressional Budget Office estimates that the payments to settle malpractice lawsuits and the premiums doctors pay for malpractice insurance account for ________ of health care costs in the United States.

Why might a young, healthy person choose not to buy health insurance?

Figure 7-1 Figure 7-1 represents the market for vaccinations.Vaccinations are considered a benefit to society, and the figure shows both the marginal private benefit and the marginal social benefit from vaccinations. -Refer to Figure 7-1.Marginal social benefit is represented by which curve?

What has happened to health care's share of gross domestic product in the United States since 1965? How does this compare to what has happened to out-of-pocket spending on health care as a percentage of all spending on health care?

Which of the following is a part of the "employer mandate" provision of the Patient Protection and Affordable Care Act (ACA)?

In the United States in 2014, over 90 percent of people without health insurance were below the age of 35.

Figure 7-2 Figure 7-2 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 7-2.If consumers paid the full price of medical services, the price they would pay is

Vaccinations tend to result in a positive externality.

Which of the following is not an advantage of risk pooling?

In the United States in 2014, the percentage of people with private health insurance was about

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

Under the Patient Protection and Affordable Care Act (ACA), insurance companies will be required to participate in a high-risk pool that will cover individuals with pre-existing medical conditions.

Between 1981 and 2013, the overall mortality rate in the United States

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

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Exam 7: The Economics of Health Care

Compared to other high-income countries, health care spending per person in the United States has been

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.

Basic supply and demand analysis indicates that having firms rather than the government provide health insurance to workers

An insurance company is likely to attract customers like Clancy who want to purchase insurance because he knows better that the company that he is more likely to make a claim on a policy.What is the term used to describe the situation above?

Health insurance companies impose deductibles on policies and co-payments on claims

Briefly explain 4 of the difficulties in making cross-country comparisons in health care outcomes.

In 2015, health care's share of gross domestic product in the United States

The Congressional Budget Office estimates that the payments to settle malpractice lawsuits and the premiums doctors pay for malpractice insurance account for ________ of health care costs in the United States.

Why might a young, healthy person choose not to buy health insurance?

Figure 7-1 Figure 7-1 represents the market for vaccinations.Vaccinations are considered a benefit to society, and the figure shows both the marginal private benefit and the marginal social benefit from vaccinations. -Refer to Figure 7-1.Marginal social benefit is represented by which curve?

What has happened to health care's share of gross domestic product in the United States since 1965? How does this compare to what has happened to out-of-pocket spending on health care as a percentage of all spending on health care?

Which of the following is a part of the "employer mandate" provision of the Patient Protection and Affordable Care Act (ACA)?

In the United States in 2014, over 90 percent of people without health insurance were below the age of 35.

Figure 7-2 Figure 7-2 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 7-2.If consumers paid the full price of medical services, the price they would pay is

Vaccinations tend to result in a positive externality.

Which of the following is not an advantage of risk pooling?

In the United States in 2014, the percentage of people with private health insurance was about

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

Under the Patient Protection and Affordable Care Act (ACA), insurance companies will be required to participate in a high-risk pool that will cover individuals with pre-existing medical conditions.

Between 1981 and 2013, the overall mortality rate in the United States

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, Government Price Setting, and Taxes

Externalities, Environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, Production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, Taxes, and the Distribution of Income

Filters