Question 1

The term that is used to refer to a situation in which one party to an economic transaction has less information than the other party is

Accepted Answer

A)  inefficient market hypothesis. 
B)  moral hazard. 
C)  information disparity. 
D)  asymmetric information. 
A)  inefficient market hypothesis. 
B)  moral hazard. 
C)  information disparity. 
D)  asymmetric information.

Question 2

Which of the following parties is likely to have the most information about the health of an individual who is trying to purchase a health insurance policy?

Accepted Answer

A)  the company that issues the health insurance policy 
B)  the individual who is applying for the health insurance policy 
C)  the employer of the individual who is trying to purchase the health insurance policy 
D)  All parties in the health insurance market have access to the same level of information. 
A)  the company that issues the health insurance policy 
B)  the individual who is applying for the health insurance policy 
C)  the employer of the individual who is trying to purchase the health insurance policy 
D)  All parties in the health insurance market have access to the same level of information.

Question 3

If consumers paid the full price of medical services instead of using health insurance and third-party payers to cover part of the cost,the quantity of medical services provided would increase.

Accepted Answer

A) True 
 B)False

Question 4

The aging of the U.S.population has tended to ________ spending on health care,and the development of new drugs and medical equipment has tended to ________ spending on health care.

Accepted Answer

A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease 
A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease

Question 5

The overall mortality rate in the United States has remained fairly constant for the past 30 years.

Accepted Answer

A) True 
 B)False

Question 6

In the United States from 1981 to 2011,deaths from all of the following declined substantially except

Accepted Answer

A)  cancer. 
B)  kidney disease. 
C)  heart attacks. 
D)  strokes. 
A)  cancer. 
B)  kidney disease. 
C)  heart attacks. 
D)  strokes.

Question 7

Which of the following is not an advantage of risk pooling?

Accepted Answer

A)  By insuring large groups as opposed to individuals, health insurance providers reduce adverse selection. 
B)  It gives very sick people in the group the same access to health care and to pay the same premiums as healthy individuals. 
C)  It is easier for an insurance company to estimate the average number of claims likely to be filed under a group policy than it is to predict the number of claims likely to be filed under an individual policy. 
D)  Individuals who are insured and therefore do not have to pay the full cost of health care services may be inclined to over-use those services. 
A)  By insuring large groups as opposed to individuals, health insurance providers reduce adverse selection. 
B)  It gives very sick people in the group the same access to health care and to pay the same premiums as healthy individuals. 
C)  It is easier for an insurance company to estimate the average number of claims likely to be filed under a group policy than it is to predict the number of claims likely to be filed under an individual policy. 
D)  Individuals who are insured and therefore do not have to pay the full cost of health care services may be inclined to over-use those services.

Question 8

Of the following high-income countries,which has the lowest life expectancy at birth?

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

The overall decline in death rates in the United States since 1981 was due to all of the following except

Accepted Answer

A)  a decline in smoking. 
B)  the decline in the population. 
C)  the availability of new prescription drugs. 
D)  new surgical techniques. 
A)  a decline in smoking. 
B)  the decline in the population. 
C)  the availability of new prescription drugs. 
D)  new surgical techniques.

Question 10

In most circumstances,employees do not pay taxes on the value of health insurance their employers provide them.

Accepted Answer

A) True 
 B)False

Question 11

In the United States in 2012,about two-thirds of those who were not covered by health insurance

Accepted Answer

A)  are single and unemployed. 
B)  live in families in which at least one member has a job. 
C)  live in families in which all members are unemployed. 
D)  are retired from the workforce. 
A)  are single and unemployed. 
B)  live in families in which at least one member has a job. 
C)  live in families in which all members are unemployed. 
D)  are retired from the workforce.

Question 12

In which of the following countries are substantial co-payments typically required as a part of the health care system?

Accepted Answer

A)  Canada and the United States 
B)  Japan and Canada. 
C)  the United States and Japan 
D)  the United States and the United Kingdom 
A)  Canada and the United States 
B)  Japan and Canada. 
C)  the United States and Japan 
D)  the United States and the United Kingdom

Question 13

All of the following are part of the "taxes" provision of the Patient Protection and Affordable Care Act (ACA)except

Accepted Answer

A)  pharmaceutical firms and health insurance firms will pay new taxes. 
B)  investors earning more than $200,000 will pay a new tax on their investment income. 
C)  beginning in 2018, all taxes on employer-provided health insurance plans will be reduced or eliminated. 
D)  workers earning more than $200,000 will have their share of the Medicare payroll tax increase. 
A)  pharmaceutical firms and health insurance firms will pay new taxes. 
B)  investors earning more than $200,000 will pay a new tax on their investment income. 
C)  beginning in 2018, all taxes on employer-provided health insurance plans will be reduced or eliminated. 
D)  workers earning more than $200,000 will have their share of the Medicare payroll tax increase.

Question 14

Automobile insurance companies have a problem with people who buy insurance and then drive recklessly or take less care to avoid losses after being insured.In other words,the automobile insurance market is subject to

Accepted Answer

A)  asymmetric information. 
B)  market signaling. 
C)  moral hazard. 
D)  adverse selection. 
A)  asymmetric information. 
B)  market signaling. 
C)  moral hazard. 
D)  adverse selection.

Question 15

In the United States in 2012,the percentage of firms that employed more than 200 workers and offered health insurance as a fringe benefit to the workers was about

Accepted Answer

A)  29%. 
B)  42%. 
C)  61%. 
D)  98%. 
A)  29%. 
B)  42%. 
C)  61%. 
D)  98%.

Question 16

Health insurance plans which typically reimburse doctors mainly by paying a flat fee per patient are known as

Accepted Answer

A)  fee-for-service plans. 
B)  preferred provider organizations. 
C)  single-health-payer systems. 
D)  health maintenance organizations. 
A)  fee-for-service plans. 
B)  preferred provider organizations. 
C)  single-health-payer systems. 
D)  health maintenance organizations.

Question 17

What is adverse selection?

Accepted Answer

A)  It refers to the private, self-interested actions people that people pursue, which when taken collectively leads to a loss in economic surplus. 
B)  It refers to the actions people take after they have entered into a transaction that make the other party to the transaction worse off. 
C)  It refers to the situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction. 
D)  It refers to the actions people take before they enter into a transaction so as to mislead the other party to the transaction. 
A)  It refers to the private, self-interested actions people that people pursue, which when taken collectively leads to a loss in economic surplus. 
B)  It refers to the actions people take after they have entered into a transaction that make the other party to the transaction worse off. 
C)  It refers to the situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction. 
D)  It refers to the actions people take before they enter into a transaction so as to mislead the other party to the transaction.

Question 18

Consider a used car market in which half the cars are good and half are bad (lemons).If buyers are rational,the prices being offered for used cars will result in

Accepted Answer

A)  an equal proportion of a good cars and lemons being sold in an efficient market. 
B)  a larger proportion of good cars being sold and consequently, consumer surplus is increased. 
C)  a larger proportion of lemons being sold and consequently, producer surplus is increased. 
D)  an equal proportion of good cars and lemons being sold in an inefficient market. 
A)  an equal proportion of a good cars and lemons being sold in an efficient market. 
B)  a larger proportion of good cars being sold and consequently, consumer surplus is increased. 
C)  a larger proportion of lemons being sold and consequently, producer surplus is increased. 
D)  an equal proportion of good cars and lemons being sold in an inefficient market.

Question 19

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

Accepted Answer

A single-payer health care system,such a

Question 20

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.

The term that is used to refer to a situation in which one party to an economic transaction has less information than the other party is

Which of the following parties is likely to have the most information about the health of an individual who is trying to purchase a health insurance policy?

If consumers paid the full price of medical services instead of using health insurance and third-party payers to cover part of the cost,the quantity of medical services provided would increase.

The aging of the U.S.population has tended to spending on health care,and the development of new drugs and medical equipment has tended to spending on health care.

The overall mortality rate in the United States has remained fairly constant for the past 30 years.

In the United States from 1981 to 2011,deaths from all of the following declined substantially except

Which of the following is not an advantage of risk pooling?

Of the following high-income countries,which has the lowest life expectancy at birth?

The overall decline in death rates in the United States since 1981 was due to all of the following except

In most circumstances,employees do not pay taxes on the value of health insurance their employers provide them.

In the United States in 2012,about two-thirds of those who were not covered by health insurance

In which of the following countries are substantial co-payments typically required as a part of the health care system?

All of the following are part of the "taxes" provision of the Patient Protection and Affordable Care Act (ACA)except

Automobile insurance companies have a problem with people who buy insurance and then drive recklessly or take less care to avoid losses after being insured.In other words,the automobile insurance market is subject to

In the United States in 2012,the percentage of firms that employed more than 200 workers and offered health insurance as a fringe benefit to the workers was about

Health insurance plans which typically reimburse doctors mainly by paying a flat fee per patient are known as

What is adverse selection?

Consider a used car market in which half the cars are good and half are bad (lemons).If buyers are rational,the prices being offered for used cars will result in

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

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

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

The term that is used to refer to a situation in which one party to an economic transaction has less information than the other party is

Which of the following parties is likely to have the most information about the health of an individual who is trying to purchase a health insurance policy?

If consumers paid the full price of medical services instead of using health insurance and third-party payers to cover part of the cost,the quantity of medical services provided would increase.

The aging of the U.S.population has tended to ________ spending on health care,and the development of new drugs and medical equipment has tended to ________ spending on health care.

The overall mortality rate in the United States has remained fairly constant for the past 30 years.

In the United States from 1981 to 2011,deaths from all of the following declined substantially except

Which of the following is not an advantage of risk pooling?

Of the following high-income countries,which has the lowest life expectancy at birth?

The overall decline in death rates in the United States since 1981 was due to all of the following except

In most circumstances,employees do not pay taxes on the value of health insurance their employers provide them.

In the United States in 2012,about two-thirds of those who were not covered by health insurance

In which of the following countries are substantial co-payments typically required as a part of the health care system?

All of the following are part of the "taxes" provision of the Patient Protection and Affordable Care Act (ACA)except

Automobile insurance companies have a problem with people who buy insurance and then drive recklessly or take less care to avoid losses after being insured.In other words,the automobile insurance market is subject to

In the United States in 2012,the percentage of firms that employed more than 200 workers and offered health insurance as a fringe benefit to the workers was about

Health insurance plans which typically reimburse doctors mainly by paying a flat fee per patient are known as

What is adverse selection?

Consider a used car market in which half the cars are good and half are bad (lemons).If buyers are rational,the prices being offered for used cars will result in

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

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

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

The aging of the U.S.population has tended to spending on health care,and the development of new drugs and medical equipment has tended to spending on health care.