Exam 5: The Economics of Health Care

The principal-agent problem is a problem

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 $9,000 for a good used car but only $3,000 for a lemon.Sellers of good used cars value their cars at $7,500 each and sellers of lemons value their cars at $1,500 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?

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

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?

Most doctors and hospitals operate as private businesses in all of the following countries except

Health insurance plans which typically reimburse doctors mainly by paying a flat fee per patient are known as

The Congressional Budget Office estimates that ________ of the increase in federal spending on Medicare and Medicaid over the next 75 years will be due to increases in the cost of providing health care.

In 2016,________ percent of people enrolled in health insurance marketplaces had a choice of at least three insurance companies from which to buy a policy.By 2017,________ percent had that choice.

________ occurs when one party takes advantage of having more information than another party about the attributes of the good or service they will exchange.

In 2017,health care's share of gross domestic product in the United States

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?

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.

Figure 5-1 Figure 5-1 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 5-1.The efficient equilibrium quantity is ________ thousand vaccinations.

What are two reasons why employees would prefer for their employer to pay for their health insurance rather than receiving increased wages and paying for their own health insurance?

Adverse selection is a situation in which one party to an economic transaction has less information than the other party.

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

In 2016,the average height of adult males in the United States was

The situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction is known as asymmetric information.

Health insurance companies impose deductibles on policies and co-payments on claims to reduce the problem of adverse selection.

Figure 5-2 Figure 5-2 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 5-2.The market equilibrium quantity is ________ thousand vaccinations.