Question 1

Which one of these conditions is not a part of asymmetric information?

Accepted Answer

A) parties are engaged in and economic transaction. 
B) information is not uniform. 
C) the government usually intercedes to fix the problem. 
D) all of the above. 
A) parties are engaged in and economic transaction. 
B) information is not uniform. 
C) the government usually intercedes to fix the problem. 
D) all of the above. C

Question 2

Which country had the highest per capita expenditures on health care in 2004?

Accepted Answer

A) Australia 
B) Japan 
C) Norway 
D) United States 
A) Australia 
B) Japan 
C) Norway 
D) United States D

Question 3

What effect would a "price cap" have on medical services?

Accepted Answer

As we learned in previous chapters,a price cap would have the effect of creating shortages in that the supply of medical services would not meet the demand.

Question 4

Health care markets may be inefficient because of

Accepted Answer

A) poor information. 
B) adverse selection. 
C) moral hazard. 
D) all of the above. 
A) poor information. 
B) adverse selection. 
C) moral hazard. 
D) all of the above.

Question 5

Paying money in order to guarantee a certain level of compensation should an adverse event occur is

Accepted Answer

A) risk aversion. 
B) risk smoothing. 
C) risk pooling. 
D) risk rating. 
A) risk aversion. 
B) risk smoothing. 
C) risk pooling. 
D) risk rating.

Question 6

Suppose that the demand for medical services can be characterized by the equation X = 500 - P/3.Suppose further that the supply of health services can be characterized by the equation X = P - 100.
(a)What is the equilibrium quantity and price in the market for health services?
(b)In an effort to make health services more affordable,the government restricts the price of health services to be no greater than $250.What will happen to the quantity of health services in the market?

Accepted Answer

(a)Set 1,500 - 3X = 100 + X to

Question 7

A third-party payment is

Accepted Answer

A) made by three people. 
B) a payment that requires three signatures. 
C) is made by someone other than the consumer. 
D) is not used in the US health system. 
A) made by three people. 
B) a payment that requires three signatures. 
C) is made by someone other than the consumer. 
D) is not used in the US health system.

Question 8

President Obama has suggested some form or universal health coverage for all Americans.How do you feel about this?

Accepted Answer

Answers will vary with some saying that

Question 9

What percentage of African Americans are uninsured?

Accepted Answer

A) 80 
B) 3 
C) 37 
D) 21 
A) 80 
B) 3 
C) 37 
D) 21

Question 10

-In Figure 9.3,Panel B,$40,000 for certain is as desirable as $47,000 with risk.

Accepted Answer

A) True 
 B)False

Question 11

-In Figure 9.2,the value of insurance is $7,000.

Accepted Answer

A) True 
 B)False

Question 12

We have read in this chapter that people with insurance may be more likely to engage in risky behavior because they are insured.Does it make sense then that there should be an "insurance tax" on people that engage in these types of activities?

Accepted Answer

Answers will vary,but in gener

Question 13

In 2007,the percentage of health care expenditures paid out-of-pocket was

Accepted Answer

A) 6.9. 
B) 8.3. 
C) 12. 
D) 1.5. 
A) 6.9. 
B) 8.3. 
C) 12. 
D) 1.5.

Question 14

Pooling individuals allow insurance companies to _______ risk from a societal point of view.

Accepted Answer

A) increase 
B) decrease 
C) do nothing regarding 
D) none of the above 
A) increase 
B) decrease 
C) do nothing regarding 
D) none of the above

Question 15

-In Table 9.2,Emily will loose no income if she becomes sick.

Accepted Answer

A) True 
 B)False

Question 16

A co-payment and coinsurance are the same thing.

Accepted Answer

A) True 
 B)False

Question 17

Expected values

Accepted Answer

A) are calculated as the average value. 
B) are calculated over all possible outcomes. 
C) are weighted by the probability of an even occurring. 
D) all of the above. 
A) are calculated as the average value. 
B) are calculated over all possible outcomes. 
C) are weighted by the probability of an even occurring. 
D) all of the above.

Question 18

When people behave in ways that involve increased risk because they have insurance,this is known as

Accepted Answer

A) adverse selection. 
B) moral hazard. 
C) asymmetric information. 
D) a HMO. 
A) adverse selection. 
B) moral hazard. 
C) asymmetric information. 
D) a HMO.

Question 19

We have read that the uninsured and the insured behave differently in regard to medical services.Suppose that the insured have a demand curve that can be written as Q = 100 - P,where Q is the quantity of medical services and P is the price.Suppose further that the uninsured have a demand curve that can be written as Q = 100 - 2P.
(a)At a price of $10 of medical services,how much will each demand?
(b)At a quantity of 50 units,how much will the price be for the insured and uninsured?

Accepted Answer

(a)For insured at a price of $10,we have

Question 20

Most private medical insurance is provided through employers as a benefit to their employees.

Accepted Answer

A) True 
 B)False

Which one of these conditions is not a part of asymmetric information?

Which country had the highest per capita expenditures on health care in 2004?

What effect would a "price cap" have on medical services?

Health care markets may be inefficient because of

Paying money in order to guarantee a certain level of compensation should an adverse event occur is

A third-party payment is

President Obama has suggested some form or universal health coverage for all Americans.How do you feel about this?

What percentage of African Americans are uninsured?

-In Figure 9.3,Panel B,$40,000 for certain is as desirable as $47,000 with risk.

-In Figure 9.2,the value of insurance is $7,000.

We have read in this chapter that people with insurance may be more likely to engage in risky behavior because they are insured.Does it make sense then that there should be an "insurance tax" on people that engage in these types of activities?

In 2007,the percentage of health care expenditures paid out-of-pocket was

Pooling individuals allow insurance companies to _______ risk from a societal point of view.

-In Table 9.2,Emily will loose no income if she becomes sick.

A co-payment and coinsurance are the same thing.

Expected values

When people behave in ways that involve increased risk because they have insurance,this is known as

Most private medical insurance is provided through employers as a benefit to their employees.

Introduction

Tools of Positive Analysis

Tools of Normative Analysis

Public Goods

Externalities

Political Economy

Education

Cost-Benefit Analysis

Government and the Market for Health Care

Social Security

Income Redistribution: Conceptual Issues

Expenditure Programs for the Poor

Taxation and Income Distribution

Taxation and Efficiency

Efficient and Equitable Taxation

The Personal Income Tax

Personal Taxation and Behavior

The Corporation Tax

Deficit Finance

Fundamental Tax Reform: Taxes on Consumption and Wealth

Public Finance in a Federal System

Filters

Exam 9: The Health Care Market

Which one of these conditions is not a part of asymmetric information?

Which country had the highest per capita expenditures on health care in 2004?

What effect would a "price cap" have on medical services?

Health care markets may be inefficient because of

Paying money in order to guarantee a certain level of compensation should an adverse event occur is

A third-party payment is

President Obama has suggested some form or universal health coverage for all Americans.How do you feel about this?

What percentage of African Americans are uninsured?

-In Figure 9.3,Panel B,$40,000 for certain is as desirable as $47,000 with risk.

-In Figure 9.2,the value of insurance is $7,000.

We have read in this chapter that people with insurance may be more likely to engage in risky behavior because they are insured.Does it make sense then that there should be an "insurance tax" on people that engage in these types of activities?

In 2007,the percentage of health care expenditures paid out-of-pocket was

Pooling individuals allow insurance companies to _______ risk from a societal point of view.

-In Table 9.2,Emily will loose no income if she becomes sick.

A co-payment and coinsurance are the same thing.

Expected values

When people behave in ways that involve increased risk because they have insurance,this is known as

Most private medical insurance is provided through employers as a benefit to their employees.

Introduction

Tools of Positive Analysis

Tools of Normative Analysis

Public Goods

Externalities

Political Economy

Education

Cost-Benefit Analysis

Government and the Market for Health Care

Social Security

Income Redistribution: Conceptual Issues

Expenditure Programs for the Poor

Taxation and Income Distribution

Taxation and Efficiency

Efficient and Equitable Taxation

The Personal Income Tax

Personal Taxation and Behavior

The Corporation Tax

Deficit Finance

Fundamental Tax Reform: Taxes on Consumption and Wealth

Public Finance in a Federal System

Filters