Question 1

What is the main difference between a single-payer health care system and socialized medicine?

Accepted Answer

A single-payer health care system, such

Question 2

In the United States, health care spending as a percentage of GDP has declined since 1965.

Accepted Answer

A) True 
 B)False

Question 3

The Congressional Budget Office estimates that the Patient Protection and Affordable Care Act (ACA) will

Accepted Answer

A)  increase government spending by just under $1 trillion over 10 years. 
B)  cost the government significantly more than the additional taxes and fees enacted under the law will bring in. 
C)  eliminate the budget deficit within 10 years. 
D)  actually reduce government spending over a 20 year period. 
A)  increase government spending by just under $1 trillion over 10 years. 
B)  cost the government significantly more than the additional taxes and fees enacted under the law will bring in. 
C)  eliminate the budget deficit within 10 years. 
D)  actually reduce government spending over a 20 year period.

Question 4

The Patient Protection and Affordable Care Act (ACA) is scheduled to be fully implemented by 2019, at which point

Accepted Answer

A)  current budget cuts are expected to have completely offset the cost of the program. 
B)  more than 30 million additional individuals are expected to have health care coverage. 
C)  all hospitals in the United States will be taken over by the federal government. 
D)  private health insurance companies will no longer exist in the United States. 
A)  current budget cuts are expected to have completely offset the cost of the program. 
B)  more than 30 million additional individuals are expected to have health care coverage. 
C)  all hospitals in the United States will be taken over by the federal government. 
D)  private health insurance companies will no longer exist in the United States.

Question 5

Adverse selection is a situation in which one party to an economic transaction has less information than the other party.

Accepted Answer

A) True 
 B)False

Question 6

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.
-Under current tax law individuals do not pay taxes on health insurance benefits they receive from their employers. As a result

Accepted Answer

A)  the federal government spends more than it receives in tax revenue. 
B)  individuals are encouraged to want generous health coverage that reduces their incentives to cut costs. 
C)  the quality of health care provided is less than it would be if benefits were taxed. 
D)  politicians are encouraged to raise income and payroll taxes. 
A)  the federal government spends more than it receives in tax revenue. 
B)  individuals are encouraged to want generous health coverage that reduces their incentives to cut costs. 
C)  the quality of health care provided is less than it would be if benefits were taxed. 
D)  politicians are encouraged to raise income and payroll taxes.

Question 7

The health care system in ________ is referred to as socialized medicine, under which the government owns most of the hospitals and employs most of the doctors.

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 8

The health care system in Japan is referred to as ________, under which every resident of Japan is required to enroll in either a private or the government-provided health insurance program.

Accepted Answer

A)  an out-of-pocket system 
B)  a single-payer health care system 
C)  a universal health insurance system 
D)  socialized medicine 
A)  an out-of-pocket system 
B)  a single-payer health care system 
C)  a universal health insurance system 
D)  socialized medicine

Question 9

In the United States, health care spending on people over age 65 is ________ on people aged 18 to 24.

Accepted Answer

A)  one third as much as 
B)  twice as much as 
C)  six times greater than 
D)  forty times greater than 
A)  one third as much as 
B)  twice as much as 
C)  six times greater than 
D)  forty times greater than

Question 10

In the United States in 2012, the percentage of people without some form of private health insurance was about

Accepted Answer

A)  17%. 
B)  29%. 
C)  36%. 
D)  83%. 
A)  17%. 
B)  29%. 
C)  36%. 
D)  83%.

Question 11

Health insurance companies impose deductibles on policies and co-payments on claims to reduce the problem of adverse selection.

Accepted Answer

A) True 
 B)False

Question 12

Of the following high-income countries, which has the lowest number of MRI units per 1 million population?

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 13

Figure 7-1   Figure 7-1 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 7-1. At the market equilibrium, the deadweight loss is equal to

Accepted Answer

A)  $0. 
B)  $250,000. 
C)  $500,000. 
D)  $1,000,000. 
A)  $0. 
B)  $250,000. 
C)  $500,000. 
D)  $1,000,000.

Question 14

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. The efficient price of medical services is

Accepted Answer

A)  $40. 
B)  $55. 
C)  $65. 
D)  >$65. 
A)  $40. 
B)  $55. 
C)  $65. 
D)  >$65.

Question 15

Pricing insurance policies is made difficult because buyers have more information than sellers. This difficulty is an example of

Accepted Answer

A)  moral hazard. 
B)  adverse selection. 
C)  asymmetric information. 
D)  the free rider problem. 
A)  moral hazard. 
B)  adverse selection. 
C)  asymmetric information. 
D)  the free rider problem.

Question 16

In the United States in 2012, of those companies employing more than 200 workers that offer health care to those workers, about ________ percent of employees accept the coverage.

Accepted Answer

A)  10 
B)  36 
C)  62 
D)  98 
A)  10 
B)  36 
C)  62 
D)  98

Question 17

If a state requires all drivers to purchase auto insurance, insurance companies still face the problem of

Accepted Answer

A)  correctly pricing their insurance. 
B)  sunk costs. 
C)  adverse selection. 
D)  excess demand for their insurance. 
A)  correctly pricing their insurance. 
B)  sunk costs. 
C)  adverse selection. 
D)  excess demand for their insurance.

Question 18

Compared to the United States, health care spending per person in other high-income countries has been

Accepted Answer

A)  growing at a slower rate. 
B)  growing at a faster rate. 
C)  growing at approximately the same rate. 
D)  declining at approximately the same rate. 
A)  growing at a slower rate. 
B)  growing at a faster rate. 
C)  growing at approximately the same rate. 
D)  declining at approximately the same rate.

Question 19

In the United States in 2011, over 90 percent of people without health insurance were below the age of 34.

Accepted Answer

A) True 
 B)False

Question 20

What is health insurance?

Accepted Answer

Health insurance is a contract

Exam 7: The Economics of Health Care

What is the main difference between a single-payer health care system and socialized medicine?

In the United States, health care spending as a percentage of GDP has declined since 1965.

The Congressional Budget Office estimates that the Patient Protection and Affordable Care Act (ACA) will

The Patient Protection and Affordable Care Act (ACA) is scheduled to be fully implemented by 2019, at which point

Adverse selection is a situation in which one party to an economic transaction has less information than the other party.

The health care system in ________ is referred to as socialized medicine, under which the government owns most of the hospitals and employs most of the doctors.

The health care system in Japan is referred to as ________, under which every resident of Japan is required to enroll in either a private or the government-provided health insurance program.

In the United States, health care spending on people over age 65 is ________ on people aged 18 to 24.

In the United States in 2012, the percentage of people without some form of private health insurance was about

Health insurance companies impose deductibles on policies and co-payments on claims to reduce the problem of adverse selection.

Of the following high-income countries, which has the lowest number of MRI units per 1 million population?

Figure 7-1 Figure 7-1 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 7-1. At the market equilibrium, the deadweight loss is equal to

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. The efficient price of medical services is

Pricing insurance policies is made difficult because buyers have more information than sellers. This difficulty is an example of

In the United States in 2012, of those companies employing more than 200 workers that offer health care to those workers, about ________ percent of employees accept the coverage.

If a state requires all drivers to purchase auto insurance, insurance companies still face the problem of

Compared to the United States, health care spending per person in other high-income countries has been

In the United States in 2011, over 90 percent of people without health insurance were below the age of 34.

What is health insurance?

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