Question 1

Briefly explain 4 of the difficulties in making cross-country comparisons in health care outcomes.

Accepted Answer

Data problems: Countries do not always c

Question 2

How can changes over time of the average height of the people in a country help to indicate the standard of living in a country?

Accepted Answer

A person's height partly relies on nutri

Question 3

In the United States from 1981 to 2011, deaths from diabetes increased largely due to the effects of

Accepted Answer

A)  foreign-produced insulin. 
B)  stress in the workplace. 
C)  a larger immigrant population. 
D)  increasing obesity. 
A)  foreign-produced insulin. 
B)  stress in the workplace. 
C)  a larger immigrant population. 
D)  increasing obesity.

Question 4

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 quantity is ________ thousand vaccinations.

Accepted Answer

A)  200 
B)  400 
C)  600 
D)  >600 
A)  200 
B)  400 
C)  600 
D)  >600

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

The Pre-Existing Condition Insurance Plan is a federally administered part of the Affordable Care Act, and is designed for people with pre-existing medical conditions to obtain insurance. By offering health insurance to all U.S. citizens with pre-existing medical conditions, the Pre-Existing Condition Insurance Plan eliminates ________ for both the insurer and the insured, and eliminates ________ for the issuer of the insurance policy.

Accepted Answer

A)  the principal-agent problem; moral hazard 
B)  asymmetric information; adverse selection 
C)  adverse selection; the principal-agent problem 
D)  moral hazard; adverse selection 
A)  the principal-agent problem; moral hazard 
B)  asymmetric information; adverse selection 
C)  adverse selection; the principal-agent problem 
D)  moral hazard; adverse selection

Question 7

Which of the following individuals is most likely to purchase a life insurance policy that pays out an annual income beginning at a certain age until the individual's death?

Accepted Answer

A)  Ian, who expects to have a short life expectancy because of an illness 
B)  Bradley, who has six young children 
C)  Avril, a tax attorney who wants to avoid adverse selection 
D)  Alma, who expects to live a long life, based on her family history 
A)  Ian, who expects to have a short life expectancy because of an illness 
B)  Bradley, who has six young children 
C)  Avril, a tax attorney who wants to avoid adverse selection 
D)  Alma, who expects to live a long life, based on her family history

Question 8

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. If consumers paid the full price of medical services, the price they would pay is

Accepted Answer

A)  $25. 
B)  $40. 
C)  $55. 
D)  >$55. 
A)  $25. 
B)  $40. 
C)  $55. 
D)  >$55.

Question 9

A typical consumer of health care in the United States

Accepted Answer

A)  pays the full price of his or her health care. 
B)  pays more than the full price of his or her health care. 
C)  does not pay any of the price of his or her health care. 
D)  does not pay the full price of his or her health care. 
A)  pays the full price of his or her health care. 
B)  pays more than the full price of his or her health care. 
C)  does not pay any of the price of his or her health care. 
D)  does not pay the full price of his or her health care.

Question 10

In the United States in 2012, the percentage of people that directly purchased an individual or family health insurance policy from an insurance company was about

Accepted Answer

A)  2%. 
B)  10%. 
C)  17%. 
D)  26%. 
A)  2%. 
B)  10%. 
C)  17%. 
D)  26%.

Question 11

Because consumers who have insurance provided by their employers usually only pay a deductible for a visit to the doctor's office,

Accepted Answer

A)  they demand a larger quantity of health care services than they would if they paid a price that better represented the true cost of providing the service. 
B)  they demand a smaller quantity of health care services than they would if they paid a price that better represented the true cost of providing the service. 
C)  the doctors supply a smaller quantity of health care services than they would if the consumer paid a price that better represented the true cost of providing the service. 
D)  the insurance companies provide a larger quantity of health care services than they would if the consumer paid a price that better represented the true cost of providing the service. 
A)  they demand a larger quantity of health care services than they would if they paid a price that better represented the true cost of providing the service. 
B)  they demand a smaller quantity of health care services than they would if they paid a price that better represented the true cost of providing the service. 
C)  the doctors supply a smaller quantity of health care services than they would if the consumer paid a price that better represented the true cost of providing the service. 
D)  the insurance companies provide a larger quantity of health care services than they would if the consumer paid a price that better represented the true cost of providing the service.

Question 12

Those who favor changes in the market for health care that would make it more like the markets for other goods and services are generally in favor of universal health care coverage.

Accepted Answer

A) True 
 B)False

Question 13

Economists who support market-based reforms for health care believe that increased competition among providers of health care would ________ costs and ________ economic efficiency.

Accepted Answer

A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease 
A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease

Question 14

Of the following high-income countries, which has the lowest 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 15

Economists who support market-based reforms for health care believe that increased competition among providers of health care would

Accepted Answer

A)  decrease costs but decrease economic efficiency. 
B)  decrease costs and increase economic efficiency. 
C)  increase costs but increase economic efficiency. 
D)  increase costs and decrease economic efficiency. 
A)  decrease costs but decrease economic efficiency. 
B)  decrease costs and increase economic efficiency. 
C)  increase costs but increase economic efficiency. 
D)  increase costs and decrease economic efficiency.

Question 16

The difference between adverse selection and moral hazard is that

Accepted Answer

A)  moral hazard happens at the time parties enter into a transaction; adverse selection occurs after the transaction takes place. 
B)  adverse selection happens at the time parties enter into a transaction; moral hazard occurs after the transaction takes place. 
C)  moral hazard is the motive that is behind one party entering into a transaction with another party. Adverse selection refers to the other party being harmed by the transaction. 
D)  moral hazard refers to the likelihood that a transaction will lead one party to be better off at the expense of the other party to the transaction. Adverse selection refers to the consequences of the transaction after it has occurred. 
A)  moral hazard happens at the time parties enter into a transaction; adverse selection occurs after the transaction takes place. 
B)  adverse selection happens at the time parties enter into a transaction; moral hazard occurs after the transaction takes place. 
C)  moral hazard is the motive that is behind one party entering into a transaction with another party. Adverse selection refers to the other party being harmed by the transaction. 
D)  moral hazard refers to the likelihood that a transaction will lead one party to be better off at the expense of the other party to the transaction. Adverse selection refers to the consequences of the transaction after it has occurred.

Question 17

Which of the following is not part of the "taxes" provision of the Patient Protection and Affordable Care Act (ACA)?

Accepted Answer

A)  Pharmaceutical firms and health insurance firms will pay new taxes. 
B)  Investors earning more than $200,000 will pay a new tax on their investment income. 
C)  Beginning in 2018, all taxes on employer-provided health insurance plans will be reduced or eliminated. 
D)  Workers earning more than $200,000 will have their share of the Medicare payroll tax increase. 
A)  Pharmaceutical firms and health insurance firms will pay new taxes. 
B)  Investors earning more than $200,000 will pay a new tax on their investment income. 
C)  Beginning in 2018, all taxes on employer-provided health insurance plans will be reduced or eliminated. 
D)  Workers earning more than $200,000 will have their share of the Medicare payroll tax increase.

Question 18

Vaccinations tend to result in a positive externality.

Accepted Answer

A) True 
 B)False

Question 19

If a doctor knows that an insurance company will pay for most of a patient's bill, the doctor has more of an incentive to require additional medical procedures and tests, even if the patient may not require them. This is an example of

Accepted Answer

A)  moral hazard. 
B)  the principle-agent problem. 
C)  asymmetric information. 
D)  adverse selection. 
A)  moral hazard. 
B)  the principle-agent problem. 
C)  asymmetric information. 
D)  adverse selection.

Question 20

Health problems prevent people from working harder, which can lower a country's total income. This indicates that in effect, health problems

Accepted Answer

A)  are a primary cause of price decreases. 
B)  increase the incentive to work. 
C)  shift country's production possibilities frontier inward. 
D)  decrease consumer surplus. 
A)  are a primary cause of price decreases. 
B)  increase the incentive to work. 
C)  shift country's production possibilities frontier inward. 
D)  decrease consumer surplus.

Exam 7: The Economics of Health Care

Briefly explain 4 of the difficulties in making cross-country comparisons in health care outcomes.

How can changes over time of the average height of the people in a country help to indicate the standard of living in a country?

In the United States from 1981 to 2011, deaths from diabetes increased largely due to the effects of

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

Which of the following individuals is most likely to purchase a life insurance policy that pays out an annual income beginning at a certain age until the individual's death?

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. If consumers paid the full price of medical services, the price they would pay is

A typical consumer of health care in the United States

In the United States in 2012, the percentage of people that directly purchased an individual or family health insurance policy from an insurance company was about

Because consumers who have insurance provided by their employers usually only pay a deductible for a visit to the doctor's office,

Those who favor changes in the market for health care that would make it more like the markets for other goods and services are generally in favor of universal health care coverage.

Economists who support market-based reforms for health care believe that increased competition among providers of health care would ________ costs and ________ economic efficiency.

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

Economists who support market-based reforms for health care believe that increased competition among providers of health care would

The difference between adverse selection and moral hazard is that

Which of the following is not part of the "taxes" provision of the Patient Protection and Affordable Care Act (ACA)?

Vaccinations tend to result in a positive externality.

If a doctor knows that an insurance company will pay for most of a patient's bill, the doctor has more of an incentive to require additional medical procedures and tests, even if the patient may not require them. This is an example of

Health problems prevent people from working harder, which can lower a country's total income. This indicates that in effect, health problems

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

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Economists who support market-based reforms for health care believe that increased competition among providers of health care would costs and economic efficiency.