Exam 7: The Economics of Health Care

Figure 7-4 Figure 7-4 represents the market for medical services with and without insurance, and the effect of a third-party payer system on the demand for medical services. -Refer to Figure 7-4. The efficient price of medical services is

Economists John Cogan, Glenn Hubbard, and Daniel Kessler have estimated that ________ the tax preference for employer-provided health insurance would reduce spending by people enrolled in these programs by 33 percent.

A majority of people in the United States do not have private health insurance.

If a state requires all drivers to buy health insurance, the problem of adverse selection is eliminated.

Which of the following Nobel laureates became known for the study of asymmetric information?

The Congressional Budget Office estimates that the payments to settle malpractice lawsuits and the premiums doctors pay for malpractice insurance account for ________ of health care costs in the United States.

What is an externality? Explain how someone receiving a meningitis vaccination is an example of an externality in the market for health care.

Figure 7-5 Figure 7-5 represents the market for medical services with and without insurance, and the effect of a third-party payer system on the demand for medical services. -Refer to Figure 7-5. If consumers paid the full price of medical services, the equilibrium quantity would be

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

Briefly describe the most important differences between the market for health care and the market for other goods and services.

Most employees ________ pay taxes on the value of health insurance provided by employers, and most people ________ get a tax break when buying individual health insurance policies.

A doctor pursuing his own interests rather than the interests of his patients is an example of the principal-agent problem.

Figure 7-4 Figure 7-4 represents the market for medical services with and without insurance, and the effect of a third-party payer system on the demand for medical services. -In addition to covering the costs of unpredictable events, health insurance typically covers many planned expenses, such as routine checkups, annual physicals, and the cost of vaccinations. Because of this, health insurance

In the United States in 2011, over 50 percent of people without health insurance were below the age of 34.

Because of asymmetric information, most used cars that are offered for sale will be sold for prices that are greater than their true value. Because of this fact, the used car market falls victim to

In a market with positive externalities, the market equilibrium price will be less than the efficient equilibrium price.

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

Figure 7-2 Figure 7-2 represents the market for vaccinations. Vaccinations are considered a benefit to society, and the figure shows both the marginal private benefit and the marginal social benefit from vaccinations. -Refer to Figure 7-2. The market equilibrium price is

Better health allows people to work harder, which raises a country's total income. This indicates that in effect, better health

The largest government-run health care system in the world, with 1.7 million employees, is in