Question 1

Of the following high-income countries,which has the highest life expectancy at birth?

Accepted Answer

A) Canada 
B) Japan 
C) the United Kingdom 
D) the United States 
A) Canada 
B) Japan 
C) the United Kingdom 
D) the United States

Question 2

About ________ of research on new medicines is carried out in the United States.U.S.

Accepted Answer

A) 10 percent 
B) one-half 
C) two-thirds 
D) 90 percent 
A) 10 percent 
B) one-half 
C) two-thirds 
D) 90 percent

Question 3

Why is the study of asymmetric information associated with the market for "lemons"?

Accepted Answer

A) Sellers of citrus fruit - lemons,oranges,grapefruit - know the difference between bad fruit and good fruit; buyers do not have this information. 
B) Because there is little advertising in the market for lemons,buyers have difficulty determining the quality of lemons before they are purchased. 
C) Potential buyers of used cars have difficulty separating good used cars from bad used cars; bad used cars are often referred to as "lemons." 
D) Most sellers of used cars have less information about their cars than the dealers who buy them; used cars are often referred to as "lemons." 
A) Sellers of citrus fruit - lemons,oranges,grapefruit - know the difference between bad fruit and good fruit; buyers do not have this information. 
B) Because there is little advertising in the market for lemons,buyers have difficulty determining the quality of lemons before they are purchased. 
C) Potential buyers of used cars have difficulty separating good used cars from bad used cars; bad used cars are often referred to as "lemons." 
D) Most sellers of used cars have less information about their cars than the dealers who buy them; used cars are often referred to as "lemons."

Question 4

Adverse selection will occur in a market as a result of

Accepted Answer

A) asymmetric information. 
B) moral hazard. 
C) the sale of "lemons." 
D) rational ignorance. 
A) asymmetric information. 
B) moral hazard. 
C) the sale of "lemons." 
D) rational ignorance.

Question 5

In the principal-agent relationship,the principal is

Accepted Answer

A) the owner of a resource that has hired a third party to act in the best interest of that third party. 
B) the person who is placed in control over resources that are not his own,with a contractual obligation to use these resources in the interests of some other party. 
C) the person who is placed in control over resources that are not his own and agrees to compensate the resource owner in the event of outcomes that do not satisfy the resource owner. 
D) the person who places his resources in professional hands in exchange for the professional's promise to act on the resource owner's behalf. 
A) the owner of a resource that has hired a third party to act in the best interest of that third party. 
B) the person who is placed in control over resources that are not his own,with a contractual obligation to use these resources in the interests of some other party. 
C) the person who is placed in control over resources that are not his own and agrees to compensate the resource owner in the event of outcomes that do not satisfy the resource owner. 
D) the person who places his resources in professional hands in exchange for the professional's promise to act on the resource owner's behalf.

Question 6

Some economists believe that by making health care coverage mandatory for all individuals,the ________ for medical services will likely increase,which will ________ the costs of health care.

Accepted Answer

A) demand; increase 
B) demand; decrease 
C) supply; increase 
D) demand and supply; decrease 
A) demand; increase 
B) demand; decrease 
C) supply; increase 
D) demand and supply; decrease

Question 7

In 2011,the average height of adult males in the United States was

Accepted Answer

A) 5' 7." 
B) 5' 9." 
C) 6' 0." 
D) 6' 4." 
A) 5' 7." 
B) 5' 9." 
C) 6' 0." 
D) 6' 4."

Question 8

Two key consequences of asymmetric information are adverse selection and moral hazard.Define each concept,provide one example of each and explain how the two concepts differ.

Accepted Answer

Adverse selection is the situation in wh

Question 9

In the United States in 2009,over 50 percent of people without health insurance were below the age of 34.

Accepted Answer

A) True 
 B)False

Question 10

The largest government-run health care system in the world,with 1.7 million employees,is the National Health Service (NHS)in the United Kingdom.The NHS receives its funding primarily from

Accepted Answer

A) tariffs. 
B) the World Health Organization. 
C) income taxes. 
D) private businesses. 
A) tariffs. 
B) the World Health Organization. 
C) income taxes. 
D) private businesses.

Question 11

In 2011,health care's share of gross domestic product in the United States was about

Accepted Answer

A) 6.5 percent. 
B) 17.5 percent. 
C) 45 percent. 
D) 62.5 percent. 
A) 6.5 percent. 
B) 17.5 percent. 
C) 45 percent. 
D) 62.5 percent.

Question 12

Doctors have ________ incentive to control their costs when consumers ________ for a visit to the doctor's office.

Accepted Answer

A) more; only pay a deductible 
B) less; only pay a deductible 
C) less; pay entirely out of pocket 
D) more; have a third-party payer that pays 
A) more; only pay a deductible 
B) less; only pay a deductible 
C) less; pay entirely out of pocket 
D) more; have a third-party payer that pays

Question 13

Two consequences of asymmetric information are adverse selection and moral hazard.An important distinction between the two is

Accepted Answer

A) adverse selection exists prior to the completion of a transaction while moral hazard occurs after the transaction is completed. 
B) moral hazard exists prior to the completion of a transaction while adverse selection occurs after the transaction is completed. 
C) adverse selection leads to an inefficient quantity while moral hazard leads to an efficient quantity. 
D) moral hazard leads to an inefficient quantity while adverse selection leads to an efficient quantity. 
A) adverse selection exists prior to the completion of a transaction while moral hazard occurs after the transaction is completed. 
B) moral hazard exists prior to the completion of a transaction while adverse selection occurs after the transaction is completed. 
C) adverse selection leads to an inefficient quantity while moral hazard leads to an efficient quantity. 
D) moral hazard leads to an inefficient quantity while adverse selection leads to an efficient quantity.

Question 14

Under current U.S.tax laws individuals do not pay taxes on health insurance benefits they receive from their employers.

Accepted Answer

A) True 
 B)False

Question 15

Some economists have argued that certain characteristics of the delivery of health care justify government intervention.One of these characteristics is

Accepted Answer

A) health care is a public good. 
B) health care is nonrivalrous and nonexcludable. 
C) health care generates negative externalities. 
D) health care generates positive externalities. 
A) health care is a public good. 
B) health care is nonrivalrous and nonexcludable. 
C) health care generates negative externalities. 
D) health care generates positive externalities.

Question 16

About ________ of pharmaceutical patents are issued to U.S.firms.

Accepted Answer

A) 10 percent 
B) one-half 
C) two-thirds 
D) 90 percent 
A) 10 percent 
B) one-half 
C) two-thirds 
D) 90 percent

Question 17

One consequence of adverse selection in the market for used cars is that most used cars sold will be lemons.

Accepted Answer

A) True 
 B)False

Question 18

The number of people receiving Medicare is expected to grow to 80 million by the year

Accepted Answer

A) 2105. 
B) 2020. 
C) 2030. 
D) 2075. 
A) 2105. 
B) 2020. 
C) 2030. 
D) 2075.

Question 19

"Cost disease" refers to the tendency for high productivity in the service sector to lead to lower costs in those industries.

Accepted Answer

A) True 
 B)False

Question 20

In 2011,the average life expectancy at birth in the United Kingdom and other high-income countries was around ________ years.

Accepted Answer

A) 60 
B) 70 
C) 80 
D) 90 
A) 60 
B) 70 
C) 80 
D) 90

Of the following high-income countries,which has the highest life expectancy at birth?

About ________ of research on new medicines is carried out in the United States.U.S.

Why is the study of asymmetric information associated with the market for "lemons"?

Adverse selection will occur in a market as a result of

In the principal-agent relationship,the principal is

Some economists believe that by making health care coverage mandatory for all individuals,the for medical services will likely increase,which will the costs of health care.

In 2011,the average height of adult males in the United States was

Two key consequences of asymmetric information are adverse selection and moral hazard.Define each concept,provide one example of each and explain how the two concepts differ.

In the United States in 2009,over 50 percent of people without health insurance were below the age of 34.

The largest government-run health care system in the world,with 1.7 million employees,is the National Health Service (NHS)in the United Kingdom.The NHS receives its funding primarily from

In 2011,health care's share of gross domestic product in the United States was about

Doctors have incentive to control their costs when consumers for a visit to the doctor's office.

Two consequences of asymmetric information are adverse selection and moral hazard.An important distinction between the two is

Under current U.S.tax laws individuals do not pay taxes on health insurance benefits they receive from their employers.

Some economists have argued that certain characteristics of the delivery of health care justify government intervention.One of these characteristics is

About ________ of pharmaceutical patents are issued to U.S.firms.

One consequence of adverse selection in the market for used cars is that most used cars sold will be lemons.

The number of people receiving Medicare is expected to grow to 80 million by the year

"Cost disease" refers to the tendency for high productivity in the service sector to lead to lower costs in those industries.

In 2011,the average life expectancy at birth in the United Kingdom and other high-income countries was around ________ years.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, taxes, and the Distribution of Income

Filters

Exam 7: The Economics of Health Care

Of the following high-income countries,which has the highest life expectancy at birth?

About ________ of research on new medicines is carried out in the United States.U.S.

Why is the study of asymmetric information associated with the market for "lemons"?

Adverse selection will occur in a market as a result of

In the principal-agent relationship,the principal is

Some economists believe that by making health care coverage mandatory for all individuals,the ________ for medical services will likely increase,which will ________ the costs of health care.

In 2011,the average height of adult males in the United States was

Two key consequences of asymmetric information are adverse selection and moral hazard.Define each concept,provide one example of each and explain how the two concepts differ.

In the United States in 2009,over 50 percent of people without health insurance were below the age of 34.

The largest government-run health care system in the world,with 1.7 million employees,is the National Health Service (NHS)in the United Kingdom.The NHS receives its funding primarily from

In 2011,health care's share of gross domestic product in the United States was about

Doctors have ________ incentive to control their costs when consumers ________ for a visit to the doctor's office.

Two consequences of asymmetric information are adverse selection and moral hazard.An important distinction between the two is

Under current U.S.tax laws individuals do not pay taxes on health insurance benefits they receive from their employers.

Some economists have argued that certain characteristics of the delivery of health care justify government intervention.One of these characteristics is

About ________ of pharmaceutical patents are issued to U.S.firms.

One consequence of adverse selection in the market for used cars is that most used cars sold will be lemons.

The number of people receiving Medicare is expected to grow to 80 million by the year

"Cost disease" refers to the tendency for high productivity in the service sector to lead to lower costs in those industries.

In 2011,the average life expectancy at birth in the United Kingdom and other high-income countries was around ________ years.

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Externalities, environmental Policy, and Public Goods

Elasticity: the Responsiveness of Demand and Supply

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Consumer Choice and Behavioral Economics

Technology, production, and Costs

Firms in Perfectly Competitive Markets

Monopolistic Competition: the Competitive Model in a More Realistic Setting

Oligopoly: Firms in Less Competitive Markets

Monopoly and Antitrust Policy

Pricing Strategy

The Markets for Labor and Other Factors of Production

Public Choice, taxes, and the Distribution of Income

Filters

Some economists believe that by making health care coverage mandatory for all individuals,the for medical services will likely increase,which will the costs of health care.

Doctors have incentive to control their costs when consumers for a visit to the doctor's office.