Question 1

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 2

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 3

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 4

Life expectancy at birth in the United States has more than doubled since 1850.

Accepted Answer

A) True 
 B)False

Question 5

When consumers pay only a fraction of the true cost of medical services,their demand increases.The marginal cost of producing these extra services

Accepted Answer

A)  is greater than the marginal benefit consumers receive from them. 
B)  is less than the marginal benefit consumers receive from them. 
C)  is equal to the marginal benefit consumers receive from them. 
D)  is zero due to the insurance payments. 
A)  is greater than the marginal benefit consumers receive from them. 
B)  is less than the marginal benefit consumers receive from them. 
C)  is equal to the marginal benefit consumers receive from them. 
D)  is zero due to the insurance payments.

Question 6

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

Accepted Answer

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

Question 7

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 8

Of the following high-income countries,which has the highest infant mortality rate?

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 9

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 10

In 2012,employees covered by company-provided health insurance paid ________ percent of the cost of their own health insurance.

Accepted Answer

A)  3 
B)  18 
C)  37 
D)  65 
A)  3 
B)  18 
C)  37 
D)  65

Question 11

In the United States,the bulk of health care spending is paid by health insurance companies.Such a system is also called a third-party payer system where consumers of health care pay a nominal fee and the rest are paid by the health insurance provider.Why might such a system lead to an inefficient outcome?

Accepted Answer

A)  Health insurance companies have an incentive to control cost and therefore tend to deny consumers many cutting edge medical treatments. 
B)  Consumers have an incentive to over-consume health care services because they pay prices well below the cost of providing these services. 
C)  Physicians concerned that insurance companies may not approve payments tend not to order expensive tests for their patients. 
D)  Consumers fearing that excessive use of health care services may lead to a rise in insurance premiums tend to under-consume health care services. 
A)  Health insurance companies have an incentive to control cost and therefore tend to deny consumers many cutting edge medical treatments. 
B)  Consumers have an incentive to over-consume health care services because they pay prices well below the cost of providing these services. 
C)  Physicians concerned that insurance companies may not approve payments tend not to order expensive tests for their patients. 
D)  Consumers fearing that excessive use of health care services may lead to a rise in insurance premiums tend to under-consume health care services.

Question 12

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 13

Under the Patient Protection and Affordable Care Act (ACA),residents who do not have health insurance will not be allowed to seek employment.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

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 16

The number of people receiving Medicare is expected to ________ by the year 2030.

Accepted Answer

A)  reach 5 million by 
B)  stabilize 
C)  decline by 10 percent 
D)  grow to 80 million 
A)  reach 5 million by 
B)  stabilize 
C)  decline by 10 percent 
D)  grow to 80 million

Question 17

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 18

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.The efficient quantity of medical services is

Accepted Answer

A)  200. 
B)  500. 
C)  700. 
D)  >700. 
A)  200. 
B)  500. 
C)  700. 
D)  >700.

Question 19

Under the Patient Protection and Affordable Care Act (ACA),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 20

What is an externality? Explain how someone receiving a meningitis vaccination is an example of an externality in the market for health care.

Accepted Answer

An externality is a benefit or cost that

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

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

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

Life expectancy at birth in the United States has more than doubled since 1850.

When consumers pay only a fraction of the true cost of medical services,their demand increases.The marginal cost of producing these extra services

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

Of the following high-income countries,which has the highest infant mortality rate?

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

In 2012,employees covered by company-provided health insurance paid ________ percent of the cost of their own health insurance.

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

Under the Patient Protection and Affordable Care Act (ACA),residents who do not have health insurance will not be allowed to seek employment.

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

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

The number of people receiving Medicare is expected to ________ by the year 2030.

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

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.The efficient quantity of medical services is

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

What is an externality? Explain how someone receiving a meningitis vaccination is an example of an externality in the market for health care.

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

Filters

Exam 7: The Economics of Health Care

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

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

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

Life expectancy at birth in the United States has more than doubled since 1850.

When consumers pay only a fraction of the true cost of medical services,their demand increases.The marginal cost of producing these extra services

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

Of the following high-income countries,which has the highest infant mortality rate?

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

In 2012,employees covered by company-provided health insurance paid ________ percent of the cost of their own health insurance.

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

Under the Patient Protection and Affordable Care Act (ACA),residents who do not have health insurance will not be allowed to seek employment.

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

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

The number of people receiving Medicare is expected to ________ by the year 2030.

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

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.The efficient quantity of medical services is

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

What is an externality? Explain how someone receiving a meningitis vaccination is an example of an externality in the market for health care.

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

Filters