Exam 7: The Economics of Health Care

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.

What is moral hazard?

In the United States,private health insurance companies

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.

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

A goal of market-based reforms of the health care system is to give patients an incentive to pay more attention to the prices of medical services.This would tend to ________ economic efficiency by ________ the costs of medical services

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

Suppose that in a market for used cars,there are good used cars and bad used cars (lemons).Consumers are willing to pay as much as $6,000 for a good used car but only $1,000 for a lemon.Sellers of good used cars value their cars at $5,000 each and sellers of lemons value their cars at $800 each.Buyers cannot tell if a used car is reliable or is a lemon.Based on this information,what is the likely outcome in the market for used cars?

Suppose you see a 2006 Scion xB Sport Wagon advertised in the local newspaper for $8,500.If you knew the car was reliable,you would be willing to pay $10,000 for it.If you knew the car was unreliable,you would only be willing to pay $5,500 for it.Under what circumstances should you buy the car?

Which of the following factors help to explain the sustained increases in health care spending in the United States,and which do not? a.the additional paperwork,duplication,and waste generated in the U.S.health care system compared to systems in other countries b.the increasing costs of malpractice insurance and malpractice lawsuit settlements c.the number of uninsured patients receiving hospital treatment that could have been preformed at a lower cost in doctors' offices d.the slow growth in labor productivity in health care compared to that in the economy as a whole e.the aging population f.increases in the cost of providing health care

What is adverse selection?

Vaccinating people against a communicable disease such as influenza not only reduces the chances that the person vaccinated will catch the disease but also reduces the probability that an epidemic of the disease will occur.Which of the following statements is true?

Economists John Cogan,Glenn Hubbard,and Daniel Kessler have estimated that repealing the tax preference for employer-provided health insurance would

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

Typically,the higher the level of income per person in a country,the higher the level of spending per person on health care.This relationship between income and spending indicates that health care is a

Consider a used car market in which half the cars are good and half are bad (lemons).Suppose the average price of a good car is $9,000 and the average price of a lemon is $3,000.If rational buyers are willing to pay $6,000 for a used car,then sellers will agree to sell mostly the lemons at this price.What is the term used to describe this situation?

Which of the following is a part of the "employer mandate" provision of the Patient Protection and Affordable Care Act (ACA)?

In the United States,total health care spending per person has been ________,and out-of-pocket spending on health care per person has been ________.

Figure 7-2 Figure 7-2 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 7-2.With insurance and a third-party payer system,what price do doctors receive for medical services?

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