Question 1

Sam decides to join the Gigantic State University's rugby team when he learns that his health insurance will pay for any subsequent injury.This illustrates:

Accepted Answer

A)  the diagnosis-related-group system. 
B)  a "pay or play" system. 
C)  the moral hazard problem. 
D)  the Coase theorem. 
A)  the diagnosis-related-group system. 
B)  a "pay or play" system. 
C)  the moral hazard problem. 
D)  the Coase theorem.

Question 2

The unemployed are disproportionately represented among the uninsured because:

Accepted Answer

A)  one must be working to qualify for Medicaid. 
B)  most workers obtain health insurance through their employers. 
C)  most are young and in excellent health,so they choose not to purchase health insurance. 
D)  a large percentage of the unemployed are heads of single-parent families. 
A)  one must be working to qualify for Medicaid. 
B)  most workers obtain health insurance through their employers. 
C)  most are young and in excellent health,so they choose not to purchase health insurance. 
D)  a large percentage of the unemployed are heads of single-parent families.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

The fundamental problem associated with the U.S.health care system is that:

Accepted Answer

A)  the financing of health care through insurance has resulted in the underallocation of resources to the health care industry. 
B)  frivolous malpractice suits have increased malpractice insurance premiums for doctors. 
C)  at the margin,the value of health care services may be less than the value of alternative goods and services. 
D)  there are too many general practitioners and not enough specialists. 
A)  the financing of health care through insurance has resulted in the underallocation of resources to the health care industry. 
B)  frivolous malpractice suits have increased malpractice insurance premiums for doctors. 
C)  at the margin,the value of health care services may be less than the value of alternative goods and services. 
D)  there are too many general practitioners and not enough specialists.

Question 5

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 6

Economists argue that in treating patients:

Accepted Answer

A)  physicians should use any test or procedures that might help the patient. 
B)  health care should not be rationed by physicians because it is an entitlement or right. 
C)  both benefits and costs should be taken into account by physicians. 
D)  physicians should use any test or procedure whose marginal benefit is positive. 
A)  physicians should use any test or procedures that might help the patient. 
B)  health care should not be rationed by physicians because it is an entitlement or right. 
C)  both benefits and costs should be taken into account by physicians. 
D)  physicians should use any test or procedure whose marginal benefit is positive.

Question 7

Whole Foods Market's personal wellness accounts for employees:

Accepted Answer

A)  create significant moral hazard in the purchase of health care services. 
B)  provide bonus payments for employees meeting certain health criteria and participating in company wellness activities. 
C)  encourage employees to consider the opportunity costs of their medical spending. 
D)  encourage employees to overspend for health care as they view it as "free money." 
A)  create significant moral hazard in the purchase of health care services. 
B)  provide bonus payments for employees meeting certain health criteria and participating in company wellness activities. 
C)  encourage employees to consider the opportunity costs of their medical spending. 
D)  encourage employees to overspend for health care as they view it as "free money."

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

If labor productivity in the health care industry rises very slowly relative to wages and salaries in the industry,this would tend to:

Accepted Answer

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

Question 10

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 11

About three-fourths of all health care costs are paid out of pocket by patients.

Accepted Answer

A) True 
 B)False

Question 12

Singapore encourages competition in its health care market by:

Accepted Answer

A)  requiring hospitals to post prices for services and by government publishing hospital performance records. 
B)  avoiding any government involvement in the health care market. 
C)  operating government-run hospitals to compete directly with private hospitals. 
D)  outsourcing all of its health care services to foreign providers. 
A)  requiring hospitals to post prices for services and by government publishing hospital performance records. 
B)  avoiding any government involvement in the health care market. 
C)  operating government-run hospitals to compete directly with private hospitals. 
D)  outsourcing all of its health care services to foreign providers.

Question 13

Preferred provider organizations (PPOs):

Accepted Answer

A)  charge a fixed amount per member,hire many of their own physicians,and provide health services only to members. 
B)  require that their members give up the right to file medical malpractice suits. 
C)  are illegal in several states. 
D)  require physicians and hospitals to provide discounted prices for their services as a condition for being included in the insurance plan. 
A)  charge a fixed amount per member,hire many of their own physicians,and provide health services only to members. 
B)  require that their members give up the right to file medical malpractice suits. 
C)  are illegal in several states. 
D)  require physicians and hospitals to provide discounted prices for their services as a condition for being included in the insurance plan.

Question 14

Which of the following is not one of the new taxes imposed under the PPACA?

Accepted Answer

A)  2.9 percent excise tax on medical devices. 
B)  10 percent tax on indoor tanning. 
C)  3.8 percent tax on "junk food." 
D)  40 percent tax on employers providing insurance to employees in excess of $10,200 per year for individuals or $27,500 per year for families. 
A)  2.9 percent excise tax on medical devices. 
B)  10 percent tax on indoor tanning. 
C)  3.8 percent tax on "junk food." 
D)  40 percent tax on employers providing insurance to employees in excess of $10,200 per year for individuals or $27,500 per year for families.

Question 15

Health care costs have greatly increased in recent years in the United States.This fact alone does not establish an overallocation of resources to health care because:

Accepted Answer

A)  the benefits of health care have also greatly increased in recent years. 
B)  rising medical care prices have inflated health care costs. 
C)  the marginal cost of health care exceeds the average total cost of health care. 
D)  negative externalities sometimes result from additional health care spending. 
A)  the benefits of health care have also greatly increased in recent years. 
B)  rising medical care prices have inflated health care costs. 
C)  the marginal cost of health care exceeds the average total cost of health care. 
D)  negative externalities sometimes result from additional health care spending.

Question 16

Rapidly rising U.S.health care costs have:

Accepted Answer

A)  forced the growth of wages to keep pace. 
B)  encouraged outsourcing. 
C)  caused some employers to use more part-time and temporary workers. 
D)  done all of these. 
A)  forced the growth of wages to keep pace. 
B)  encouraged outsourcing. 
C)  caused some employers to use more part-time and temporary workers. 
D)  done all of these.

Question 17

The employer mandate of the PPACA requires that:

Accepted Answer

A)  every firm must purchase health insurance for their full-time employees or pay a $2,000 fine per employee. 
B)  every firm with 50 or more full-time employees must purchase health insurance for their full-time employees or pay a $2,000 fine per employee. 
C)  every firm with fewer than 50 full-time employees must purchase health insurance for their full-time employees or pay a $2,000 fine per employee. 
D)  every firm with 500 or more employees must establish their own on-site medical facilities to provide employees with basic medical care. 
A)  every firm must purchase health insurance for their full-time employees or pay a $2,000 fine per employee. 
B)  every firm with 50 or more full-time employees must purchase health insurance for their full-time employees or pay a $2,000 fine per employee. 
C)  every firm with fewer than 50 full-time employees must purchase health insurance for their full-time employees or pay a $2,000 fine per employee. 
D)  every firm with 500 or more employees must establish their own on-site medical facilities to provide employees with basic medical care.

Question 18

The demand for health care is highly elastic with respect to both price and income.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is a demand-increasing factor in the health care market?

Accepted Answer

A)  Rising incomes. 
B)  The aging of the population. 
C)  Asymmetric information. 
D)  All of these. 
A)  Rising incomes. 
B)  The aging of the population. 
C)  Asymmetric information. 
D)  All of these.

Question 20

One of the provisions of the PPACA is a personal mandate that all individuals:

Accepted Answer

A)  pay a $1,000 deductible and 20 percent co-pay on all medical care except annual check-ups or preventative care. 
B)  contribute at least 30 percent of the total cost of employer-provided health insurance. 
C)  purchase health insurance for themselves and their dependents unless they are already covered by government or employer-provided insurance. 
D)  with preexisting conditions must purchase a specially designated government insurance plan. 
A)  pay a $1,000 deductible and 20 percent co-pay on all medical care except annual check-ups or preventative care. 
B)  contribute at least 30 percent of the total cost of employer-provided health insurance. 
C)  purchase health insurance for themselves and their dependents unless they are already covered by government or employer-provided insurance. 
D)  with preexisting conditions must purchase a specially designated government insurance plan.

Exam 23: Health Care

Sam decides to join the Gigantic State University's rugby team when he learns that his health insurance will pay for any subsequent injury.This illustrates:

The unemployed are disproportionately represented among the uninsured because:

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

The fundamental problem associated with the U.S.health care system is that:

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

Economists argue that in treating patients:

Whole Foods Market's personal wellness accounts for employees:

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

If labor productivity in the health care industry rises very slowly relative to wages and salaries in the industry,this would tend to:

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

About three-fourths of all health care costs are paid out of pocket by patients.

Singapore encourages competition in its health care market by:

Preferred provider organizations (PPOs):

Which of the following is not one of the new taxes imposed under the PPACA?

Health care costs have greatly increased in recent years in the United States.This fact alone does not establish an overallocation of resources to health care because:

Rapidly rising U.S.health care costs have:

The employer mandate of the PPACA requires that:

The demand for health care is highly elastic with respect to both price and income.

Which of the following is a demand-increasing factor in the health care market?

One of the provisions of the PPACA is a personal mandate that all individuals:

Income Inequality Poverty and Discrimination

Immigration

An Introduction to Macroeconomics

Measuring Domestic Output and National Income

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

The Aggregate Expenditures Model

Aggregate Demand and Aggregate Supply

The Balance of Payments, Exchange Rates, and Trade Deficits

Money, Banking, and Financial Institutions

Money Creation

Interest Rates and Monetary Policy

Financial Economics

Extending the Analysis of Aggregate Supply

Current Issues in Macro Theory and Policy

International Trade

The Balance of Payments, Exchange Rates, and Trade Deficits

The Economics of Developing Countries

The United States and the Global Economy

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