Question 1

Which of the following results from patients having better information about their health status than insurers?

Accepted Answer

A) Principle-agent problem. 
B) Rational ignorance. 
C) Externalities. 
D) Adverse selection. 
E) The substitution effect. 
A) Principle-agent problem. 
B) Rational ignorance. 
C) Externalities. 
D) Adverse selection. 
E) The substitution effect. D

Question 2

The government agency that controls the development and availability of new medical discoveries, including pharmaceutical drugs is

Accepted Answer

A) the Health Care Financing Administration. 
B) the Food and Drug Administration. 
C) the Centers for Disease Control. 
D) the National Institutes for Health. 
E) the Federal Emergency Medical Administration. 
A) the Health Care Financing Administration. 
B) the Food and Drug Administration. 
C) the Centers for Disease Control. 
D) the National Institutes for Health. 
E) the Federal Emergency Medical Administration. B

Question 3

Which of the following is not a result of moral hazard?

Accepted Answer

A) Deductibles and coinsurance. 
B) Increased medical care spending. 
C) Increased likelihood of visiting a physician. 
D) Higher health insurance premiums. 
E) All of the above result from moral hazard. 
A) Deductibles and coinsurance. 
B) Increased medical care spending. 
C) Increased likelihood of visiting a physician. 
D) Higher health insurance premiums. 
E) All of the above result from moral hazard. E

Question 4

If a hospital is experiencing economies of scale,

Accepted Answer

A) its average cost curve is positively sloped as output increases. 
B) its average cost curve is negatively sloped as output increases. 
C) it should reduce its output level to lower costs. 
D) quality is falling as output is rising. 
E) both b and c are true. 
A) its average cost curve is positively sloped as output increases. 
B) its average cost curve is negatively sloped as output increases. 
C) it should reduce its output level to lower costs. 
D) quality is falling as output is rising. 
E) both b and c are true.

Question 5

A person with AIDS applies for health insurance but hides his health status from the insurance company.What is the likely result for the insurance company?

Accepted Answer

A) Principle-agent problem. 
B) Rational ignorance. 
C) Externalities. 
D) Adverse selection. 
E) The substitution effect. 
A) Principle-agent problem. 
B) Rational ignorance. 
C) Externalities. 
D) Adverse selection. 
E) The substitution effect.

Question 6

When a physician knows more about alternative treatments than her patients, we say that _______ exists.

Accepted Answer

A) rational ignorance. 
B) perfect information. 
C) asymmetric information. 
D) moral hazard. 
E) adverse selection. 
A) rational ignorance. 
B) perfect information. 
C) asymmetric information. 
D) moral hazard. 
E) adverse selection.

Question 7

Under which of the following circumstances is the principal-agent problem likely to be most serious.

Accepted Answer

A) Between general practitioners and patients. 
B) Between surgeons and patients. 
C) Between hospitals and nurses. 
D) Between dentists and physicians. 
E) Between physicians and lawyers. 
A) Between general practitioners and patients. 
B) Between surgeons and patients. 
C) Between hospitals and nurses. 
D) Between dentists and physicians. 
E) Between physicians and lawyers.

Question 8

What measures would likely lower infant mortality rates in the United States?

Accepted Answer

A) Prenatal care programs in low-income neighborhoods. 
B) Reduced drug use among expectant mothers. 
C) Better nutrition. 
D) Delaying childbearing beyond the teen-age years. 
E) All of the above. 
A) Prenatal care programs in low-income neighborhoods. 
B) Reduced drug use among expectant mothers. 
C) Better nutrition. 
D) Delaying childbearing beyond the teen-age years. 
E) All of the above.

Question 9

Approximately what percentage of total health care spending goes toward hospital care?

Accepted Answer

A) One-tenth. 
B) One-fifth. 
C) One-fourth. 
D) One-third. 
E) One-half. 
A) One-tenth. 
B) One-fifth. 
C) One-fourth. 
D) One-third. 
E) One-half.

Question 10

Between 1960 and 1999, out-of-pocket spending on health care changed from almost _____ percent of total spending to less than _____ percent of total spending.

Accepted Answer

A) 10, 30. 
B) 20, 15. 
C) 30, 10. 
D) 50, 15. 
E) 60, 25. 
A) 10, 30. 
B) 20, 15. 
C) 30, 10. 
D) 50, 15. 
E) 60, 25.

Question 11

The concept deadweight loss refers to

Accepted Answer

A) lost profit that results from government action. 
B) lost revenue because competition forces prices down. 
C) lost surplus resulting from prices being set above competitive equilibrium. 
D) lost utility due to goods costing more that consumers can afford. 
A) lost profit that results from government action. 
B) lost revenue because competition forces prices down. 
C) lost surplus resulting from prices being set above competitive equilibrium. 
D) lost utility due to goods costing more that consumers can afford.

Question 12

Inoculation programs against certain diseases such as small pox, polio, and whooping cough create

Accepted Answer

A)  public goods. 
B)  positive externalities in consumption. 
C)  nonrival goods. 
D)  nonexcludable goods. 
E)  external costs to society equal to the costs of the program. 
A)  public goods. 
B)  positive externalities in consumption. 
C)  nonrival goods. 
D)  nonexcludable goods. 
E)  external costs to society equal to the costs of the program.

Question 13

Which of the following might cause a market to produce a quantity that is less than optimal?

Accepted Answer

A) A price ceiling above the market equilibrium price. 
B) Market control by a monopolist. 
C) A subsidy to low-income consumers. 
D) None of the above. 
A) A price ceiling above the market equilibrium price. 
B) Market control by a monopolist. 
C) A subsidy to low-income consumers. 
D) None of the above.

Question 14

Approximately what percentage of total health care spending goes toward physicians' services?

Accepted Answer

A) One-tenth. 
B) One-fifth. 
C) One-fourth. 
D) One-third. 
E) One-half. 
A) One-tenth. 
B) One-fifth. 
C) One-fourth. 
D) One-third. 
E) One-half.

Question 15

Which of the following results from providers having more information about treatment alternatives than their patients?

Accepted Answer

A) Principle-agent problem. 
B) Rational ignorance. 
C) Externalities. 
D) Adverse selection. 
E) The substitution effect. 
A) Principle-agent problem. 
B) Rational ignorance. 
C) Externalities. 
D) Adverse selection. 
E) The substitution effect.

Question 16

In which of the following countries would an increase in per capita income likely result in the most improvement to health status of the population? (2006 per capita incomes in PPP dollars shown in parentheses.)

Accepted Answer

A) Mexico ($13,383) 
B) New Zealand ($26,068) 
C) Germany ($32,900) 
D) United Kingdom ($34,084) 
E) United States ($44,639) 
A) Mexico ($13,383) 
B) New Zealand ($26,068) 
C) Germany ($32,900) 
D) United Kingdom ($34,084) 
E) United States ($44,639)

Question 17

Which of the following would likely lead to the greatest improvement in health status of the population in the United States?

Accepted Answer

A) Higher per capita incomes. 
B) More spending on public health, such as improved water supply and sanitation. 
C) More medical care spending overall. 
D) Improved lifestyles, including reductions in the use of tobacco, alcohol, and drugs. 
E) More rural hospitals. 
A) Higher per capita incomes. 
B) More spending on public health, such as improved water supply and sanitation. 
C) More medical care spending overall. 
D) Improved lifestyles, including reductions in the use of tobacco, alcohol, and drugs. 
E) More rural hospitals.

Question 18

The optimal level of output may be defined as that level of output where

Accepted Answer

A) average benefit exceeds average cost by the greatest amount. 
B) total benefit equals total cost. 
C) marginal benefit exceeds marginal cost by the greatest amount. 
D) the marginal benefit of the last unit purchased equals its marginal cost. 
E) it is impossible to define optimal in any meaningful way. 
A) average benefit exceeds average cost by the greatest amount. 
B) total benefit equals total cost. 
C) marginal benefit exceeds marginal cost by the greatest amount. 
D) the marginal benefit of the last unit purchased equals its marginal cost. 
E) it is impossible to define optimal in any meaningful way.

Which of the following results from patients having better information about their health status than insurers?

The government agency that controls the development and availability of new medical discoveries, including pharmaceutical drugs is

Which of the following is not a result of moral hazard?

If a hospital is experiencing economies of scale,

A person with AIDS applies for health insurance but hides his health status from the insurance company.What is the likely result for the insurance company?

When a physician knows more about alternative treatments than her patients, we say that _______ exists.

Under which of the following circumstances is the principal-agent problem likely to be most serious.

What measures would likely lower infant mortality rates in the United States?

Approximately what percentage of total health care spending goes toward hospital care?

Between 1960 and 1999, out-of-pocket spending on health care changed from almost _ percent of total spending to less than _ percent of total spending.

The concept deadweight loss refers to

Inoculation programs against certain diseases such as small pox, polio, and whooping cough create

Which of the following might cause a market to produce a quantity that is less than optimal?

Approximately what percentage of total health care spending goes toward physicians' services?

Which of the following results from providers having more information about treatment alternatives than their patients?

In which of the following countries would an increase in per capita income likely result in the most improvement to health status of the population? (2006 per capita incomes in PPP dollars shown in parentheses.)

Which of the following would likely lead to the greatest improvement in health status of the population in the United States?

The optimal level of output may be defined as that level of output where

Usmedical Care: A System in Transition

Using E Conomics to Study Health Care Issues

Economic Evaluation in Health Care

The De Mand for Health and Medical Care

The Market for Health Insurance

Managed Care

The Physicians Servic ES Market

The Hospital Services Market

The Market for Pharmaceuticals

Confounding Factors

Policies That Enha Nce Access

Policies to Contain Costs

Medical Care Systems Worldwide

Filters

Exam 3: Analyzing Medical Care Markets

Which of the following results from patients having better information about their health status than insurers?

The government agency that controls the development and availability of new medical discoveries, including pharmaceutical drugs is

Which of the following is not a result of moral hazard?

If a hospital is experiencing economies of scale,

A person with AIDS applies for health insurance but hides his health status from the insurance company.What is the likely result for the insurance company?

When a physician knows more about alternative treatments than her patients, we say that _______ exists.

Under which of the following circumstances is the principal-agent problem likely to be most serious.

What measures would likely lower infant mortality rates in the United States?

Approximately what percentage of total health care spending goes toward hospital care?

Between 1960 and 1999, out-of-pocket spending on health care changed from almost _____ percent of total spending to less than _____ percent of total spending.

The concept deadweight loss refers to

Inoculation programs against certain diseases such as small pox, polio, and whooping cough create

Which of the following might cause a market to produce a quantity that is less than optimal?

Approximately what percentage of total health care spending goes toward physicians' services?

Which of the following results from providers having more information about treatment alternatives than their patients?

In which of the following countries would an increase in per capita income likely result in the most improvement to health status of the population? (2006 per capita incomes in PPP dollars shown in parentheses.)

Which of the following would likely lead to the greatest improvement in health status of the population in the United States?

The optimal level of output may be defined as that level of output where

Usmedical Care: A System in Transition

Using E Conomics to Study Health Care Issues

Economic Evaluation in Health Care

The De Mand for Health and Medical Care

The Market for Health Insurance

Managed Care

The Physicians Servic ES Market

The Hospital Services Market

The Market for Pharmaceuticals

Confounding Factors

Policies That Enha Nce Access

Policies to Contain Costs

Medical Care Systems Worldwide

Filters

Between 1960 and 1999, out-of-pocket spending on health care changed from almost _ percent of total spending to less than _ percent of total spending.