Question 1

According to most experts, which of the following factors is most important in causing health care costs to rise?

Accepted Answer

A)  the aging of the population 
B)  rising incomes 
C)  malpractice suits 
D)  fee-for-service health insurance and cost-increasing technology 
A)  the aging of the population 
B)  rising incomes 
C)  malpractice suits 
D)  fee-for-service health insurance and cost-increasing technology

Question 2

The Patient Protection and Affordable Care Act prohibits insurance companies from denying coverage to anyone on the basis of a preexisting medical condition.

Accepted Answer

A) True 
 B)False

Question 3

One of the economic effects of rising health care costs in the labor market is that

Accepted Answer

A)  productivity in medical care decreases. 
B)  the demand for medical workers is decreasing. 
C)  government is cutting health care coverage for workers. 
D)  employers are using more temporary and part-time workers. 
A)  productivity in medical care decreases. 
B)  the demand for medical workers is decreasing. 
C)  government is cutting health care coverage for workers. 
D)  employers are using more temporary and part-time workers.

Question 4

For many years, the price of medical care in the United States has

Accepted Answer

A)  risen at the same rate as the overall price level. 
B)  risen at a faster rate than the overall price level. 
C)  risen, but at a slower rate than the overall price level. 
D)  fallen. 
A)  risen at the same rate as the overall price level. 
B)  risen at a faster rate than the overall price level. 
C)  risen, but at a slower rate than the overall price level. 
D)  fallen.

Question 5

Because of health insurance, resources are underallocated to the health care industry.

Accepted Answer

A) True 
 B)False

Question 6

Subsidy provisions under the Patient Protection and Affordable Care Act were designed so that individuals just above the 133 percent of poverty level threshold would have to spend no more than percent of their income purchasing health insurance.

Accepted Answer

A)  7 
B)  1 
C)  10 
D)  4 
A)  7 
B)  1 
C)  10 
D)  4

Question 7

The health care industry includes the manufacture and sale of low-fat food.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is a provision of the Patient Protection and Affordable Care Act?

Accepted Answer

A)  Insurance companies may not legally deny coverage to anyone on the basis of a preexisting medical condition. 
B)  Every firm must purchase health insurance for their employees or face a $2,000 fine per employee. 
C)  Every individual must purchase their own health insurance for themselves and their dependents or pay a fine. 
D)  Adult children of parents with employer-provided health insurance can remain covered by their parents' insurance through age 35. 
A)  Insurance companies may not legally deny coverage to anyone on the basis of a preexisting medical condition. 
B)  Every firm must purchase health insurance for their employees or face a $2,000 fine per employee. 
C)  Every individual must purchase their own health insurance for themselves and their dependents or pay a fine. 
D)  Adult children of parents with employer-provided health insurance can remain covered by their parents' insurance through age 35.

Question 9

Total U.S. health care spending in 2014 was approximately

Accepted Answer

A)  $847 billion. 
B)  $1.6 trillion. 
C)  $3.0 trillion. 
D)  $4.1 trillion. 
A)  $847 billion. 
B)  $1.6 trillion. 
C)  $3.0 trillion. 
D)  $4.1 trillion.

Question 10

The United States devotes about percent of its gross domestic product to health care (2014).

Accepted Answer

A)  5.2 
B)  8.6 
C)  15.3 
D)  17.5 
A)  5.2 
B)  8.6 
C)  15.3 
D)  17.5

Question 11

The moral hazard problem created by health insurance induces consumers to underconsume health care.

Accepted Answer

A) True 
 B)False

Question 12

All other things equal, increased concern for medical ethics will

Accepted Answer

A)  increase the demand for health care. 
B)  decrease the demand for health care. 
C)  increase the supply of health care. 
D)  decrease the supply of health care. 
A)  increase the demand for health care. 
B)  decrease the demand for health care. 
C)  increase the supply of health care. 
D)  decrease the supply of health care.

Question 13

Which of the following would increase the supply of health care services?

Accepted Answer

A)  increased practice of defensive medicine 
B)  more tax subsidies for consumers 
C)  increases in physicians' productivity 
D)  increases in health insurance coverage 
A)  increased practice of defensive medicine 
B)  more tax subsidies for consumers 
C)  increases in physicians' productivity 
D)  increases in health insurance coverage

Question 14

Which of the following financed the largest share of health care spending in the U.S. in 2014?

Accepted Answer

A)  Medicare 
B)  Medicaid 
C)  copayments and deductions paid by patients 
D)  military and other public insurance (excl. Medicare and Medicaid) 
A)  Medicare 
B)  Medicaid 
C)  copayments and deductions paid by patients 
D)  military and other public insurance (excl. Medicare and Medicaid)

Question 15

Which of the following statements is correct?

Accepted Answer

A)  Limited access to the health care system is a major cause of rising health care costs. 
B)  Rising health care costs are a major cause of limited access to the health care system. 
C)  Rising health care costs have forced employers to raise real wages above labor productivity. 
D)  The tax subsidy that government provides for health care causes health care to be underconsumed. 
A)  Limited access to the health care system is a major cause of rising health care costs. 
B)  Rising health care costs are a major cause of limited access to the health care system. 
C)  Rising health care costs have forced employers to raise real wages above labor productivity. 
D)  The tax subsidy that government provides for health care causes health care to be underconsumed.

Question 16

The rising prices, quantities, and costs of health care in the U.S. are the result of

Accepted Answer

A)  demand for health care increasing faster than supply. 
B)  supply of health care decreasing. 
C)  supply of health care decreasing faster than demand. 
D)  supply of health care decreasing coupled with demand increasing. 
A)  demand for health care increasing faster than supply. 
B)  supply of health care decreasing. 
C)  supply of health care decreasing faster than demand. 
D)  supply of health care decreasing coupled with demand increasing.

Question 17

The demand for health care in industrially advanced economies is

Accepted Answer

A)  highly elastic with respect to both price and income. 
B)  highly inelastic with respect to both price and income. 
C)  highly elastic with respect to income but highly inelastic with respect to price. 
D)  about unit elasticity with respect to income and relatively inelastic with respect to price. 
A)  highly elastic with respect to both price and income. 
B)  highly inelastic with respect to both price and income. 
C)  highly elastic with respect to income but highly inelastic with respect to price. 
D)  about unit elasticity with respect to income and relatively inelastic with respect to price.

Question 18

Singapore's health care system is identified by critics of the PPACA as one good alternative system to study and emulate. Singapore does not have which of the following characteristics?

Accepted Answer

A)  Singapore has among the world's lowest infant mortality rates. 
B)  Singapore spends about the same on health care per person as the U.S., but, unlike the U.S., it ranks among the top in every health-quality category monitored by the World Health Organization. 
C)  Singapore has among the world's highest life expectancies. 
D)  Singapore spends less than 5 percent of its GDP on health care. 
A)  Singapore has among the world's lowest infant mortality rates. 
B)  Singapore spends about the same on health care per person as the U.S., but, unlike the U.S., it ranks among the top in every health-quality category monitored by the World Health Organization. 
C)  Singapore has among the world's highest life expectancies. 
D)  Singapore spends less than 5 percent of its GDP on health care.

Question 19

(Last Word) Indiana's health care plan for state employees

Accepted Answer

A)  has reduced total spending on health care, but at the cost of employees forgoing important preventative care procedures. 
B)  has reduced total spending on health care without people forgoing important preventative care procedures. 
C)  has increased total spending on health care, but with the benefit of increasing the overall health of state workers, who now take greater advantage of preventative care procedures. 
D)  has reduced health care spending for those who participate in the plan, but only a small (less than 10 percent) percentage of state employees actually use the system. 
A)  has reduced total spending on health care, but at the cost of employees forgoing important preventative care procedures. 
B)  has reduced total spending on health care without people forgoing important preventative care procedures. 
C)  has increased total spending on health care, but with the benefit of increasing the overall health of state workers, who now take greater advantage of preventative care procedures. 
D)  has reduced health care spending for those who participate in the plan, but only a small (less than 10 percent) percentage of state employees actually use the system.

Question 20

Technological progress in the health care industry has typically reduced costs and increased supply.

Accepted Answer

A) True 
 B)False

Exam 24: Health Care

According to most experts, which of the following factors is most important in causing health care costs to rise?

The Patient Protection and Affordable Care Act prohibits insurance companies from denying coverage to anyone on the basis of a preexisting medical condition.

One of the economic effects of rising health care costs in the labor market is that

For many years, the price of medical care in the United States has

Because of health insurance, resources are underallocated to the health care industry.

Subsidy provisions under the Patient Protection and Affordable Care Act were designed so that individuals just above the 133 percent of poverty level threshold would have to spend no more than percent of their income purchasing health insurance.

The health care industry includes the manufacture and sale of low-fat food.

Which of the following is a provision of the Patient Protection and Affordable Care Act?

Total U.S. health care spending in 2014 was approximately

The United States devotes about percent of its gross domestic product to health care (2014).

The moral hazard problem created by health insurance induces consumers to underconsume health care.

All other things equal, increased concern for medical ethics will

Which of the following would increase the supply of health care services?

Which of the following financed the largest share of health care spending in the U.S. in 2014?

Which of the following statements is correct?

The rising prices, quantities, and costs of health care in the U.S. are the result of

The demand for health care in industrially advanced economies is

Singapore's health care system is identified by critics of the PPACA as one good alternative system to study and emulate. Singapore does not have which of the following characteristics?

(Last Word) Indiana's health care plan for state employees

Technological progress in the health care industry has typically reduced costs and increased supply.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

Governments Role and Government Failure

Elasticity

Utility Maximization

Behavioral Economics

Businesses and the Costs of Production

Pure Competition in the Short Run

Pure Competition in the Long Run

Pure Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Technology, Rd, and Efficiency

The Demand for Resources

Wage Determination

Rent, Interest, and Profit

Natural Resource and Energy Economics

Public Finance: Expenditures and Taxes

Antitrust Policy and Regulation

Agriculture: Economics and Policy

Income Inequality, Poverty, and Discrimination

Immigration

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

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