Question 1

The Patient Protection and Affordable Care Act (PPACA) of 2010 is designed to address a wide-ranging set of issues including the following, except

Accepted Answer

A)  the large portion of health spending supported by government insurance. 
B)  the high and rising cost of health insurance and health care spending. 
C)  the fact that tens of millions of Americans do not have health insurance. 
D)  the inability of many people with preexisting conditions to obtain health insurance. 
A)  the large portion of health spending supported by government insurance. 
B)  the high and rising cost of health insurance and health care spending. 
C)  the fact that tens of millions of Americans do not have health insurance. 
D)  the inability of many people with preexisting conditions to obtain health insurance.

Question 2

A moral hazard problem arises in the health care market because health insurance encourages people to overconsume health care.

Accepted Answer

A) True 
 B)False

Question 3

Payments for which of the following would not be covered by Medicare?

Accepted Answer

A)  all reasonable costs for the first 60 days of inpatient care in a hospital per "benefit period" 
B)  posthospital nursing services, home health care, and hospice care for the terminally ill 
C)  voluntary and subsidized medical insurance to cover physician services, lab tests, and outpatient hospital services 
D)  nonprescription drugs and travel to physician offices for normal medical treatment 
A)  all reasonable costs for the first 60 days of inpatient care in a hospital per "benefit period" 
B)  posthospital nursing services, home health care, and hospice care for the terminally ill 
C)  voluntary and subsidized medical insurance to cover physician services, lab tests, and outpatient hospital services 
D)  nonprescription drugs and travel to physician offices for normal medical treatment

Question 4

If the existence of health insurance increases one's incentive to use the health care system more intensively, this is an illustration of

Accepted Answer

A)  the adverse selection problem. 
B)  the moral hazard problem. 
C)  the benefits-received principle. 
D)  the Coase theorem. 
A)  the adverse selection problem. 
B)  the moral hazard problem. 
C)  the benefits-received principle. 
D)  the Coase theorem.

Question 5

Asymmetric information in the health care market has increased the supply of health care.

Accepted Answer

A) True 
 B)False

Question 6

The major purpose of Medicare is to

Accepted Answer

A)  provide health care services to people on Social Security. 
B)  provide health care services to those receiving public assistance. 
C)  contain rising health care costs. 
D)  make a basic health care package available to all Americans. 
A)  provide health care services to people on Social Security. 
B)  provide health care services to those receiving public assistance. 
C)  contain rising health care costs. 
D)  make a basic health care package available to all Americans.

Question 7

If the provision of medical insurance encourages people to take more health risks because they know they can receive treatment, then health insurance

Accepted Answer

A)  produces an asymmetric information problem. 
B)  leads to a universal access problem. 
C)  causes a defensive medicine problem. 
D)  creates a moral hazard problem. 
A)  produces an asymmetric information problem. 
B)  leads to a universal access problem. 
C)  causes a defensive medicine problem. 
D)  creates a moral hazard problem.

Question 8

The burden of Medicaid costs is

Accepted Answer

A)  the sole responsibility of states. 
B)  the sole responsibility of the Federal government. 
C)  shared by the states and Federal government. 
D)  shared by the states and the individual receiving the benefits. 
A)  the sole responsibility of states. 
B)  the sole responsibility of the Federal government. 
C)  shared by the states and Federal government. 
D)  shared by the states and the individual receiving the benefits.

Question 9

The Patient Protection and Affordable Care Act (PPACA) includes the establishment of "insurance exchanges" in each state, the purpose of which is to

Accepted Answer

A)  create a monopoly or oligopoly of insurance companies in each state. 
B)  fix insurance premiums, similar to public utilities. 
C)  foster competition among insurance companies. 
D)  nationalize the insurance industry in each state. 
A)  create a monopoly or oligopoly of insurance companies in each state. 
B)  fix insurance premiums, similar to public utilities. 
C)  foster competition among insurance companies. 
D)  nationalize the insurance industry in each state.

Question 10

The asymmetric information problem in health care implies that the demand for health care is a "supplier-induced demand."

Accepted Answer

A) True 
 B)False

Question 11

Health care spending accounted for what percentage of U.S. GDP in 1960 and in 2014?

Accepted Answer

A)  5.0 percent and 5.5 percent, respectively 
B)  10.0 percent and 12.0 percent, respectively 
C)  5.0 percent and 17.5 percent, respectively 
D)  20.0 percent and 33.5 percent, respectively 
A)  5.0 percent and 5.5 percent, respectively 
B)  10.0 percent and 12.0 percent, respectively 
C)  5.0 percent and 17.5 percent, respectively 
D)  20.0 percent and 33.5 percent, respectively

Question 12

Supporters of setting a cap on medical malpractice (or "pain and suffering") awards do not argue which of the following?

Accepted Answer

A)  The caps will reduce medical malpractice premiums. 
B)  They will help reduce health care costs. 
C)  Patients should receive full compensation for losses, but should not be made wealthy solely from the awards. 
D)  The cap will improve the overall quality of the health care system. 
A)  The caps will reduce medical malpractice premiums. 
B)  They will help reduce health care costs. 
C)  Patients should receive full compensation for losses, but should not be made wealthy solely from the awards. 
D)  The cap will improve the overall quality of the health care system.

Question 13

Which of the following is not a reason why the demand for health care in the U.S. is quite price-inelastic?

Accepted Answer

A)  People consider health care to be a luxury. 
B)  There are only a few, or no, substitutes. 
C)  Most consumers do not shop around, preferring a long-term relationship with their doctors. 
D)  Most patients have insurance, effectively removing their budget constraint for health care. 
A)  People consider health care to be a luxury. 
B)  There are only a few, or no, substitutes. 
C)  Most consumers do not shop around, preferring a long-term relationship with their doctors. 
D)  Most patients have insurance, effectively removing their budget constraint for health care.

Question 14

As a percentage of GDP, U.S. health care spending is higher than that of any other major industrial country.

Accepted Answer

A) True 
 B)False

Question 15

The medically uninsured may wait until their illness reaches a critical stage before going to the hospital for admittance or emergency care. Hospitals in the U.S. provide how much of these uncompensated, or "free," health care services per year?

Accepted Answer

A)  about $6 billion 
B)  about $12 billion 
C)  about $40 billion 
D)  about $65 billion 
A)  about $6 billion 
B)  about $12 billion 
C)  about $40 billion 
D)  about $65 billion

Question 16

The price elasticity of demand for health care is such that an increase in the price of health care will

Accepted Answer

A)  decrease total health care expenditures. 
B)  increase total health care expenditures. 
C)  shift the demand for health care rightward. 
D)  shift the demand for health care leftward. 
A)  decrease total health care expenditures. 
B)  increase total health care expenditures. 
C)  shift the demand for health care rightward. 
D)  shift the demand for health care leftward.

Question 17

Many economists believe that at the current level of consumption of health care in the United States, the marginal cost of health care for society is

Accepted Answer

A)  less than the marginal benefit. 
B)  greater than the marginal benefit. 
C)  equal to the marginal benefit. 
D)  zero. 
A)  less than the marginal benefit. 
B)  greater than the marginal benefit. 
C)  equal to the marginal benefit. 
D)  zero.

Question 18

The dollar sum of costs that an insured individual must pay before the insurer begins to pay would be considered

Accepted Answer

A)  copayments. 
B)  play-or-pay. 
C)  fee for service. 
D)  deductibles. 
A)  copayments. 
B)  play-or-pay. 
C)  fee for service. 
D)  deductibles.

Question 19

The moral hazard problem created when consumers acquire health insurance leads them to

Accepted Answer

A)  take more care of their health. 
B)  consume more health care services. 
C)  seek less care from their physicians. 
D)  exercise more and eat healthier food. 
A)  take more care of their health. 
B)  consume more health care services. 
C)  seek less care from their physicians. 
D)  exercise more and eat healthier food.

Question 20

One way that the Patient Protection and Affordable Care Act (PPACA) hopes to foster competition among health insurance companies is through so-called insurance exchanges.

Accepted Answer

A) True 
 B)False

Exam 24: Health Care

The Patient Protection and Affordable Care Act (PPACA) of 2010 is designed to address a wide-ranging set of issues including the following, except

A moral hazard problem arises in the health care market because health insurance encourages people to overconsume health care.

Payments for which of the following would not be covered by Medicare?

If the existence of health insurance increases one's incentive to use the health care system more intensively, this is an illustration of

Asymmetric information in the health care market has increased the supply of health care.

The major purpose of Medicare is to

If the provision of medical insurance encourages people to take more health risks because they know they can receive treatment, then health insurance

The burden of Medicaid costs is

The Patient Protection and Affordable Care Act (PPACA) includes the establishment of "insurance exchanges" in each state, the purpose of which is to

The asymmetric information problem in health care implies that the demand for health care is a "supplier-induced demand."

Health care spending accounted for what percentage of U.S. GDP in 1960 and in 2014?

Supporters of setting a cap on medical malpractice (or "pain and suffering") awards do not argue which of the following?

Which of the following is not a reason why the demand for health care in the U.S. is quite price-inelastic?

As a percentage of GDP, U.S. health care spending is higher than that of any other major industrial country.

The medically uninsured may wait until their illness reaches a critical stage before going to the hospital for admittance or emergency care. Hospitals in the U.S. provide how much of these uncompensated, or "free," health care services per year?

The price elasticity of demand for health care is such that an increase in the price of health care will

Many economists believe that at the current level of consumption of health care in the United States, the marginal cost of health care for society is

The dollar sum of costs that an insured individual must pay before the insurer begins to pay would be considered

The moral hazard problem created when consumers acquire health insurance leads them to

One way that the Patient Protection and Affordable Care Act (PPACA) hopes to foster competition among health insurance companies is through so-called insurance exchanges.

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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