Question 1

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 2

The aging of the U.S.population has tended to ________ spending on health care,and the development of new drugs and medical equipment has tended to ________ spending on health care.

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 3

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 4

The health care system in the United Kingdom is referred to as ________,under which the government owns most of the hospitals and employs most of the doctors.

Accepted Answer

A)  an out-of-pocket system 
B)  a single-payer health care system 
C)  a universal health insurance system 
D)  socialized medicine 
A)  an out-of-pocket system 
B)  a single-payer health care system 
C)  a universal health insurance system 
D)  socialized medicine

Question 5

Typically,the higher the level of income per person in a country,the higher the level of spending per person on health care.This relationship between income and spending indicates that health care is a

Accepted Answer

A)  normal good. 
B)  inferior good. 
C)  luxury. 
D)  necessity. 
A)  normal good. 
B)  inferior good. 
C)  luxury. 
D)  necessity.

Question 6

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

Accepted Answer

A)  an equal proportion of a good cars and lemons being sold in an efficient market. 
B)  a larger proportion of good cars being sold and consequently, consumer surplus is increased. 
C)  a larger proportion of lemons being sold and consequently, producer surplus is increased. 
D)  an equal proportion of good cars and lemons being sold in an inefficient market. 
A)  an equal proportion of a good cars and lemons being sold in an efficient market. 
B)  a larger proportion of good cars being sold and consequently, consumer surplus is increased. 
C)  a larger proportion of lemons being sold and consequently, producer surplus is increased. 
D)  an equal proportion of good cars and lemons being sold in an inefficient market.

Question 7

Which of the following reforms could potentially reduce spending on health care without reducing the effectiveness of health care received?

Accepted Answer

A)  nationalize health care so that all health services are government funded and operated 
B)  give every citizen a fixed amount of money that can only be spent on health care services 
C)  reimburse consumers for preventive health care expenditures so as to avoid costly emergency medical treatments in the future 
D)  standardize the tax treatment of employer-based health insurance benefits and private spending on health care 
A)  nationalize health care so that all health services are government funded and operated 
B)  give every citizen a fixed amount of money that can only be spent on health care services 
C)  reimburse consumers for preventive health care expenditures so as to avoid costly emergency medical treatments in the future 
D)  standardize the tax treatment of employer-based health insurance benefits and private spending on health care

Question 8

A goal of market-based reforms of the health care system is to give patients an incentive to pay more attention to the prices of medical services.This would tend to ________ economic efficiency by ________ the costs of medical services

Accepted Answer

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

Question 9

In the United States,total health care spending per person has been ________,and out-of-pocket spending on health care per person has been ________.

Accepted Answer

A)  rising; rising 
B)  rising; falling 
C)  falling; rising 
D)  falling; falling 
A)  rising; rising 
B)  rising; falling 
C)  falling; rising 
D)  falling; falling

Question 10

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 11

What is adverse selection?

Accepted Answer

Adverse selection refers to a

Question 12

Automobile insurance companies have a problem with people who buy insurance and then drive recklessly or take less care to avoid losses after being insured.In other words,the automobile insurance market is subject to

Accepted Answer

A)  asymmetric information. 
B)  market signaling. 
C)  moral hazard. 
D)  adverse selection. 
A)  asymmetric information. 
B)  market signaling. 
C)  moral hazard. 
D)  adverse selection.

Question 13

The cost of group health insurance is lower than if an individual buys a policy on his own because

Accepted Answer

A)  the problem of adverse selection is reduced. 
B)  moral hazard costs of a group tend to move to a low average. 
C)  it is easier for the company to deny claims from a large group. 
D)  insuring a group eliminates the problem of buyers having more information than the seller. 
A)  the problem of adverse selection is reduced. 
B)  moral hazard costs of a group tend to move to a low average. 
C)  it is easier for the company to deny claims from a large group. 
D)  insuring a group eliminates the problem of buyers having more information than the seller.

Question 14

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 15

A majority of people in the United States have private health insurance.

Accepted Answer

A) True 
 B)False

Question 16

Between 1981 and 2009,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.

Question 17

Suppose a large firm allows its employees to choose whether to participate in its health insurance plan.The firm is trying to decide between two plans: Plan I has a low monthly premium but a high deductible,and Plan II has a high monthly premium but a low deductible.Under which plan is adverse selection likely to be a bigger problem?

Accepted Answer

A)  Plan I because it is likely to draw participants who expect high medical costs. This group expects to consume much health care services and therefore prefer low deductibles. 
B)  Plan II because it is likely to draw participants who expect high medical costs. Healthy individuals who do not expect to consume much health care services will not be willing to pay the high premiums. 
C)  Plan I because it is likely to draw the relatively healthy employees who do not expect to spend much on health care. Because the monthly premiums are low, the insurance company has to bear a bigger financial burden in the event of serious illnesses. 
D)  Plan II because it is likely to draw employees who tend to over-consume health care services because of the low deductible. Insurance companies are likely to end up paying out more claims than the premiums they collect. 
A)  Plan I because it is likely to draw participants who expect high medical costs. This group expects to consume much health care services and therefore prefer low deductibles. 
B)  Plan II because it is likely to draw participants who expect high medical costs. Healthy individuals who do not expect to consume much health care services will not be willing to pay the high premiums. 
C)  Plan I because it is likely to draw the relatively healthy employees who do not expect to spend much on health care. Because the monthly premiums are low, the insurance company has to bear a bigger financial burden in the event of serious illnesses. 
D)  Plan II because it is likely to draw employees who tend to over-consume health care services because of the low deductible. Insurance companies are likely to end up paying out more claims than the premiums they collect.

Question 18

Uninsured patients receiving treatments at hospital emergency rooms that could have been provided less expensively at doctor's offices account for ________ of health care costs in the United States.

Accepted Answer

A)  between 1 and 4 percent 
B)  approximately 25 percent 
C)  almost 40 percent 
D)  between 15 and 20 percent 
A)  between 1 and 4 percent 
B)  approximately 25 percent 
C)  almost 40 percent 
D)  between 15 and 20 percent

Question 19

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 20

Briefly describe are the 6 main provisions of the Patient Protection and Affordable Care Act (PPACA)?

Accepted Answer

1.Individual mandate requiring that ever

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

The aging of the U.S.population has tended to spending on health care,and the development of new drugs and medical equipment has tended to spending on health care.

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

The health care system in the United Kingdom is referred to as ________,under which the government owns most of the hospitals and employs most of the doctors.

Typically,the higher the level of income per person in a country,the higher the level of spending per person on health care.This relationship between income and spending indicates that health care is a

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

Which of the following reforms could potentially reduce spending on health care without reducing the effectiveness of health care received?

A goal of market-based reforms of the health care system is to give patients an incentive to pay more attention to the prices of medical services.This would tend to economic efficiency by the costs of medical services

In the United States,total health care spending per person has been ,and out-of-pocket spending on health care per person has been .

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

What is adverse selection?

Automobile insurance companies have a problem with people who buy insurance and then drive recklessly or take less care to avoid losses after being insured.In other words,the automobile insurance market is subject to

The cost of group health insurance is lower than if an individual buys a policy on his own because

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?

A majority of people in the United States have private health insurance.

Between 1981 and 2009,the overall mortality rate in the United States

Uninsured patients receiving treatments at hospital emergency rooms that could have been provided less expensively at doctor's offices account for ________ of health care costs in the United States.

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

Briefly describe are the 6 main provisions of the Patient Protection and Affordable Care Act (PPACA)?

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

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 5: The Economics of Health Care

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

The aging of the U.S.population has tended to ________ spending on health care,and the development of new drugs and medical equipment has tended to ________ spending on health care.

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

The health care system in the United Kingdom is referred to as ________,under which the government owns most of the hospitals and employs most of the doctors.

Typically,the higher the level of income per person in a country,the higher the level of spending per person on health care.This relationship between income and spending indicates that health care is a

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

Which of the following reforms could potentially reduce spending on health care without reducing the effectiveness of health care received?

A goal of market-based reforms of the health care system is to give patients an incentive to pay more attention to the prices of medical services.This would tend to ________ economic efficiency by ________ the costs of medical services

In the United States,total health care spending per person has been ________,and out-of-pocket spending on health care per person has been ________.

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

What is adverse selection?

Automobile insurance companies have a problem with people who buy insurance and then drive recklessly or take less care to avoid losses after being insured.In other words,the automobile insurance market is subject to

The cost of group health insurance is lower than if an individual buys a policy on his own because

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?

A majority of people in the United States have private health insurance.

Between 1981 and 2009,the overall mortality rate in the United States

Uninsured patients receiving treatments at hospital emergency rooms that could have been provided less expensively at doctor's offices account for ________ of health care costs in the United States.

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

Briefly describe are the 6 main provisions of the Patient Protection and Affordable Care Act (PPACA)?

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

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money,banks,and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

The aging of the U.S.population has tended to spending on health care,and the development of new drugs and medical equipment has tended to spending on health care.

A goal of market-based reforms of the health care system is to give patients an incentive to pay more attention to the prices of medical services.This would tend to economic efficiency by the costs of medical services

In the United States,total health care spending per person has been ,and out-of-pocket spending on health care per person has been .

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