Exam 7: The Economics of Health Care

Some economists have proposed making the tax treatment of employer-provided health insurance the same as the tax treatment of individually purchased health insurance and out-of-pocket health care spending.Such changes would make it more likely that

In the United States in 2014,the percentage of firms that employed more than 200 workers and offered health insurance as a fringe benefit to the workers was about

Higher deductibles for employer-provided health care will tend to shift the ________ curve for medical services to the ________.

Figure 7-5 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 7-5.With insurance and a third-party payer system,the equilibrium quantity of medical services is

Changes in the health of the average person are an important indicator of changes in the standard of living.

If a fire insurance company requires firms buying fire insurance to install automatic sprinkler systems,the insurance company is trying to reduce

Since 1960,out-of-pocket spending on health care has increased sharply as a fraction of all health care spending.

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

A key difficulty facing insurance companies is that people know more about their health than do insurance companies,and that those people who are seriously ill are the most likely to want to obtain health insurance.What is this phenomenon called?

________ occurs when one party takes advantage of having more information than another party about the attributes of the good or service they will exchange.

The rising cost of malpractice insurance is one of the leading causes of the increase in health care spending as a percentage of GDP in the United States.

In the United States in 2014,the percentage of people with some form of health insurance was about

Health care is generally considered a normal good.Briefly explain what you would expect to see happen to spending on health care over time,with health care being considered as a normal good.

By 2015,spending on federal health care programs such as Medicare and Medicaid had grown to 6 percent of GDP.

The overall mortality rate in the United States has declined for the past 30 years.

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.

Most employees ________ on the value of health insurance provided by employers,and most people ________ when buying individual health insurance policies.

Adverse selection is a situation in which one party to an economic transaction has less information than the other party.

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

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 $9,000 for a good used car but only $3,000 for a lemon.Sellers of good used cars value their cars at $7,500 each and sellers of lemons value their cars at $1,500 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?