Exam 7: The Economics of Health Care

In the market for insurance,

Most doctors and hospitals operate as private businesses in all of the following countries except

Most doctors are employed by the government and most hospitals are owned by the government in

Briefly describe changes in life expectancy, average height, and infant mortality in the United States since 1850.

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. At the market equilibrium,

In the United States in 2012, the percentage of firms that employed between 3 and 199 workers and did not offer health insurance as a fringe benefit to the workers was about

A key difficulty facing insurance companies is that people know more about their health than do insurance companies, and that those people who are seriously ill are the most likely to want to obtain health insurance. What is this phenomenon called?

What is adverse selection?

The United Kingdom has a health care system under which the government owns most of the hospitals and employs most of the doctors.

The rising cost of malpractice insurance is one of the leading causes of the increase in health care spending as a percentage of GDP in the United States.

What is adverse selection?

In the United States in 2012, the percentage of firms that employed between 3 and 199 workers and offered health insurance as a fringe benefit to the workers was about

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

In the principal-agent relationship, the principal is

Because consumers who have insurance provided by their employers usually only pay a deductible for a visit to the doctor's office, they ________ of health care services than they would if they paid a price that better represented the true cost of providing the service.

Insurance companies use deductibles and coinsurance to reduce moral hazard.

By 2013, spending on federal health care programs such as Medicare and Medicaid had grown to 6 percent of GDP.

Adverse selection is a situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction.

If a hospital knows that an insurance company will pay for most of a patient's bill, the hospital 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

If a fire insurance company requires firms buying fire insurance to install automatic sprinkler systems, the insurance company is trying to reduce