Exam 7: The Economics of Health Care

Suppose consumers pay less than the true cost of medical services because a third party,such as an insurance company,pays most of the bill.Draw a graph showing the supply and demand for medical services with and without a third-party payer.Identify the market equilibrium without insurance,the market equilibrium with insurance,and the area representing the deadweight loss.Be sure to label the efficient and the market prices and quantities.

Vaccinations tend to result in a positive externality.Draw a graph showing the market for vaccinations,including both the marginal private benefit curve and the marginal social benefit curve.Identify the market equilibrium price and quantity,the efficient equilibrium price and quantity,and the deadweight loss.

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 is the amount of the deadweight loss?

By the year 2019,health care's share of gross domestic product in the United States is projected to

"Cost disease" refers to the tendency for low productivity in the service sector to lead to higher costs in those industries.

The Japanese system of universal health insurance requires no co-payments from residents for health services.

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.

In the United States,consumers usually pay ________ than the true cost of medical treatment because of ________.

Of the following,which has most likely contributed the most to the rapid rise in health care costs in the United States?

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

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

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

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

What is the principle-agent problem?

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.Marginal social benefit is represented by which curve?

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.If consumers paid the full price of medical services,the equilibrium quantity would be

In the United States,health care spending per person based on income per person is ________ the average for most other countries.

Because of the positive externality of vaccinations,economic efficiency would be improved

Some economists and policymakers who are in favor of government-provided health care believe that providing health care will generate