Question 1

Moral hazard refers to the actions people take after they have entered into a transaction that make the other party to the transaction worse off.

Accepted Answer

A) True 
 B)False

Question 2

What are the main sources of health insurance in the United States?

Accepted Answer

The percentage of Americans covered by v

Question 3

The health care system in Canada is referred to as ________,and is a system in which the government provides national health insurance to all Canadian residents.

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 4

Under the Patient Protection and Affordable Care Act (PPACA),insurance companies will be required to participate in a high-risk pool that will cover individuals with pre-existing medical conditions.

Accepted Answer

A) True 
 B)False

Question 5

Health insurance typically pays for most preventive care procedures in all of the following countries except

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 6

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

Accepted Answer

A) True 
 B)False

Question 7

A majority of people in the United States have private health insurance.

Accepted Answer

A) True 
 B)False

Question 8

The situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction is known as asymmetric information.

Accepted Answer

A) True 
 B)False

Question 9

Growth in labor productivity in health care has been ________ labor productivity in the economy as a whole.

Accepted Answer

A)  approximately equal to 
B)  slightly faster than 
C)  almost twice as fast as 
D)  less than half as fast as 
A)  approximately equal to 
B)  slightly faster than 
C)  almost twice as fast as 
D)  less than half as fast as

Question 10

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 11

All of the following are part of the "individual mandate" provision of the Patient Protection and Affordable Care Act (PPACA)except

Accepted Answer

A)  individuals are allowed to opt out of the insurance program if they can prove they have no serious health issues and do so before the act fully takes effect in the year 2012. 
B)  by 2018, fines for not having health insurance will be the greater of $895 per person or 2.5 percent of income. 
C)  beginning in 2014, individuals who do not acquire health insurance will be subject to a fine. 
D)  with limited exceptions, every resident of the United States will be required to have health insurance that meets certain basic requirements. 
A)  individuals are allowed to opt out of the insurance program if they can prove they have no serious health issues and do so before the act fully takes effect in the year 2012. 
B)  by 2018, fines for not having health insurance will be the greater of $895 per person or 2.5 percent of income. 
C)  beginning in 2014, individuals who do not acquire health insurance will be subject to a fine. 
D)  with limited exceptions, every resident of the United States will be required to have health insurance that meets certain basic requirements.

Question 12

On average,people in high-income countries ________ than people in low-income countries.

Accepted Answer

A)  have a shorter life expectancy 
B)  are subject to a higher infant mortality rate 
C)  are taller 
D)  are exposed to more severe diseases 
A)  have a shorter life expectancy 
B)  are subject to a higher infant mortality rate 
C)  are taller 
D)  are exposed to more severe diseases

Question 13

Consider a used car market in which half the cars are good and half are bad (lemons).A rational buyer in this market should

Accepted Answer

A)  offer to pay a price equal to the most she would pay for a good car. 
B)  offer to pay a price equal to the most she would pay for a lemon. 
C)  offer to pay a price somewhere between the price she would pay for a good car and the price she would pay for a lemon. 
D)  save up and buy a new car. 
A)  offer to pay a price equal to the most she would pay for a good car. 
B)  offer to pay a price equal to the most she would pay for a lemon. 
C)  offer to pay a price somewhere between the price she would pay for a good car and the price she would pay for a lemon. 
D)  save up and buy a new car.

Question 14

The cost of group health insurance is lower than if an individual buys a policy on his own because

Accepted Answer

A)  the problem of adverse selection is reduced. 
B)  moral hazard costs of a group tend to move to a low average. 
C)  it is easier for the company to deny claims from a large group. 
D)  insuring a group eliminates the problem of buyers having more information than the seller. 
A)  the problem of adverse selection is reduced. 
B)  moral hazard costs of a group tend to move to a low average. 
C)  it is easier for the company to deny claims from a large group. 
D)  insuring a group eliminates the problem of buyers having more information than the seller.

Question 15

What is moral hazard?

Accepted Answer

Moral hazard is a tendency for

Question 16

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 17

In the United States from 1981 to 2009,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 18

All of the following are part of the "state health exchanges" provision of the Patient Protection and Affordable Care Act (PPACA)except

Accepted Answer

A)  each state is required to establish an Affordable Insurance Exchange by 2014. 
B)  small businesses with fewer than 50 employees will be exempt from being required to participate in the program. 
C)  low-income individuals will be eligible for tax credits to offset the costs of buying health insurance. 
D)  health insurance policies that meet certain specified requirements will be offered by state-run agencies or by non-profit firms. 
A)  each state is required to establish an Affordable Insurance Exchange by 2014. 
B)  small businesses with fewer than 50 employees will be exempt from being required to participate in the program. 
C)  low-income individuals will be eligible for tax credits to offset the costs of buying health insurance. 
D)  health insurance policies that meet certain specified requirements will be offered by state-run agencies or by non-profit firms.

Question 19

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 20

Based on the current rate of growth,health care spending as a percentage of GDP through Medicare,Medicaid,and other U.S.government programs is expected to

Accepted Answer

A)  stabilize within the next 20 years. 
B)  account for a majority of spending as a percentage of GDP within 5 years. 
C)  slow down during this decade. 
D)  more than double over the next 40 years. 
A)  stabilize within the next 20 years. 
B)  account for a majority of spending as a percentage of GDP within 5 years. 
C)  slow down during this decade. 
D)  more than double over the next 40 years.

Exam 7: The Economics of Health Care

Moral hazard refers to the actions people take after they have entered into a transaction that make the other party to the transaction worse off.

What are the main sources of health insurance in the United States?

The health care system in Canada is referred to as ________,and is a system in which the government provides national health insurance to all Canadian residents.

Under the Patient Protection and Affordable Care Act (PPACA),insurance companies will be required to participate in a high-risk pool that will cover individuals with pre-existing medical conditions.

Health insurance typically pays for most preventive care procedures in all of the following countries except

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

A majority of people in the United States have private health insurance.

The situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction is known as asymmetric information.

Growth in labor productivity in health care has been ________ labor productivity in the economy as a whole.

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

All of the following are part of the "individual mandate" provision of the Patient Protection and Affordable Care Act (PPACA)except

On average,people in high-income countries ________ than people in low-income countries.

Consider a used car market in which half the cars are good and half are bad (lemons).A rational buyer in this market should

The cost of group health insurance is lower than if an individual buys a policy on his own because

What is moral hazard?

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 2009,deaths from diabetes increased largely due to the effects of

All of the following are part of the "state health exchanges" provision of the Patient Protection and Affordable Care Act (PPACA)except

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

Based on the current rate of growth,health care spending as a percentage of GDP through Medicare,Medicaid,and other U.S.government programs is expected to

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

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