Exam 5: The Economics of Health Care

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

What are the main sources of health insurance in the United States?

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?

Uninsured patients receiving treatments at hospital emergency rooms that could have been provided less expensively at doctor's offices account for ________ of health care costs in the United States.

The Congressional Budget Office estimates that most of the increase in federal spending on Medicare and Medicaid will be due to

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

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

Under the Small Business Health Options Program (SHOP)provision of the health care plan,a small firm's employees would be pooled with the employees of other small firms.When an insurance plan covers a large number of people,

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.

A majority of people in the United States have private health insurance.

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

What is moral hazard?

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

Under the Small Business Health Options Program (SHOP)provision of the health care plan,a small firm's employees would be pooled with the employees of other small firms.When an insurance plan covers a large number of people,

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 citizens to buy health insurance,the problem of adverse selection is eliminated.

What is the principal-agent problem?

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.

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

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?