Question 1

In a market with positive externalities,the market equilibrium price will be greater than the efficient equilibrium price.

Accepted Answer

A) True 
 B)False

Question 2

The rising cost of uninsured patients receiving treatment at hospital emergency rooms is one of the leading causes of the increase in health care spending as a percentage of GDP in the United States.

Accepted Answer

A) True 
 B)False

Question 3

What is asymmetric information?

Accepted Answer

Asymmetric information occurs

Question 4

In the classic 1944 movie Double Indemnity,Barbara Stanwyck plays Phyllis Dietrichson,a woman who has devised a scheme with insurance agent Walter Neff,played by Fred MacMurray,to trick her husband into signing a life insurance policy and then kill him to collect the proceeds of the policy.In this scheme to murder her husband,Phyllis and her partner Walter took advantage of the husband when getting him to sign the life insurance policy,a situation which describes

Accepted Answer

A) rational ignorance. 
B) the principal-agent problem. 
C) adverse selection. 
D) moral hazard. 
A) rational ignorance. 
B) the principal-agent problem. 
C) adverse selection. 
D) moral hazard.

Question 5

Which of the following did not contribute to the overall decline in death rates in the United States since 1981?

Accepted Answer

A) a decline in smoking 
B) the decline in the population 
C) the availability of new prescription drugs 
D) new surgical techniques 
A) a decline in smoking 
B) the decline in the population 
C) the availability of new prescription drugs 
D) new surgical techniques

Question 6

Typically,the ________ in a country,the higher the level of spending per person on health care.

Accepted Answer

A) higher the level of income per person 
B) larger the population 
C) higher the level of income taxes 
D) lower the median age of the population 
A) higher the level of income per person 
B) larger the population 
C) higher the level of income taxes 
D) lower the median age of the population

Question 7

Japan has a single-payer health care system in which the government provides national health insurance to all Japanese residents.

Accepted Answer

A) True 
 B)False

Question 8

The overall mortality rate in the United States has declined for the past 35 years.

Accepted Answer

A) True 
 B)False

Question 9

Although most large firms in the United States offer their employees health insurance,fewer than two-thirds accept it.

Accepted Answer

A) True 
 B)False

Question 10

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.

Accepted Answer

A) very little 
B) less than half 
C) most 
D) all 
A) very little 
B) less than half 
C) most 
D) all

Question 11

Most doctors are employed by the government and most hospitals are owned by the government 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 12

Replacing employment-based health care with a government-run system could reduce employers payments for their workers insurance,but the amount that they would have to pay in overall compensation

Accepted Answer

A) would remain essentially unchanged. 
B) would dramatically increase. 
C) would fall to zero. 
D) would dramatically decrease. 
A) would remain essentially unchanged. 
B) would dramatically increase. 
C) would fall to zero. 
D) would dramatically decrease.

Question 13

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 14

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

Accepted Answer

A) bad faith. 
B) economic inefficiency. 
C) moral hazard. 
D) market failure. 
A) bad faith. 
B) economic inefficiency. 
C) moral hazard. 
D) market failure.

Question 15

Over time,people in the United States and other high-income countries have,on average,become taller,which is an indication that their nutritional status has improved.

Accepted Answer

A) True 
 B)False

Question 16

The largest government-run health care system in the world,with 1.4 million employees,is the National Health Service (NHS)in the United Kingdom.The NHS receives its funding primarily from

Accepted Answer

A) tariffs. 
B) the World Health Organization. 
C) income taxes. 
D) private businesses. 
A) tariffs. 
B) the World Health Organization. 
C) income taxes. 
D) private businesses.

Question 17

What is health insurance?

Accepted Answer

Health insurance is a contract

Question 18

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 19

What is the term that describes a situation in which one party to an economic transaction has less information than the other party?

Accepted Answer

A) inefficient market hypothesis 
B) asymmetric information 
C) unequal market structure 
D) monopsony 
A) inefficient market hypothesis 
B) asymmetric information 
C) unequal market structure 
D) monopsony

Question 20

Why is the study of asymmetric information associated with the market for "lemons"?

Accepted Answer

A) Sellers of citrus fruit-lemons,oranges,grapefruit-know the difference between bad fruit and good fruit; buyers do not have this information. 
B) Because there is little advertising in the market for lemons,buyers have difficulty determining the quality of lemons before they are purchased. 
C) Potential buyers of used cars have difficulty separating good used cars from bad used cars; bad used cars are often referred to as "lemons." 
D) Most sellers of used cars have less information about their cars than the dealers who buy them; used cars are often referred to as "lemons." 
A) Sellers of citrus fruit-lemons,oranges,grapefruit-know the difference between bad fruit and good fruit; buyers do not have this information. 
B) Because there is little advertising in the market for lemons,buyers have difficulty determining the quality of lemons before they are purchased. 
C) Potential buyers of used cars have difficulty separating good used cars from bad used cars; bad used cars are often referred to as "lemons." 
D) Most sellers of used cars have less information about their cars than the dealers who buy them; used cars are often referred to as "lemons."

In a market with positive externalities,the market equilibrium price will be greater than the efficient equilibrium price.

The rising cost of uninsured patients receiving treatment at hospital emergency rooms is one of the leading causes of the increase in health care spending as a percentage of GDP in the United States.

What is asymmetric information?

Which of the following did not contribute to the overall decline in death rates in the United States since 1981?

Typically,the ________ in a country,the higher the level of spending per person on health care.

Japan has a single-payer health care system in which the government provides national health insurance to all Japanese residents.

The overall mortality rate in the United States has declined for the past 35 years.

Although most large firms in the United States offer their employees health insurance,fewer than two-thirds accept it.

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.

Most doctors are employed by the government and most hospitals are owned by the government in

Replacing employment-based health care with a government-run system could reduce employers payments for their workers insurance,but the amount that they would have to pay in overall compensation

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.

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

Over time,people in the United States and other high-income countries have,on average,become taller,which is an indication that their nutritional status has improved.

The largest government-run health care system in the world,with 1.4 million employees,is the National Health Service (NHS)in the United Kingdom.The NHS receives its funding primarily from

What is health insurance?

What is the term that describes a situation in which one party to an economic transaction has less information than the other party?

Why is the study of asymmetric information associated with the market for "lemons"?

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

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Exam 5: The Economics of Health Care

In a market with positive externalities,the market equilibrium price will be greater than the efficient equilibrium price.

The rising cost of uninsured patients receiving treatment at hospital emergency rooms is one of the leading causes of the increase in health care spending as a percentage of GDP in the United States.

What is asymmetric information?

Which of the following did not contribute to the overall decline in death rates in the United States since 1981?

Typically,the ________ in a country,the higher the level of spending per person on health care.

Japan has a single-payer health care system in which the government provides national health insurance to all Japanese residents.

The overall mortality rate in the United States has declined for the past 35 years.

Although most large firms in the United States offer their employees health insurance,fewer than two-thirds accept it.

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.

Most doctors are employed by the government and most hospitals are owned by the government in

Replacing employment-based health care with a government-run system could reduce employers payments for their workers insurance,but the amount that they would have to pay in overall compensation

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.

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

Over time,people in the United States and other high-income countries have,on average,become taller,which is an indication that their nutritional status has improved.

The largest government-run health care system in the world,with 1.4 million employees,is the National Health Service (NHS)in the United Kingdom.The NHS receives its funding primarily from

What is health insurance?

What is the term that describes a situation in which one party to an economic transaction has less information than the other party?

Why is the study of asymmetric information associated with the market for "lemons"?

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