Question 1

In the principal-agent relationship,the agent is

Accepted Answer

A) the owner of a resource that has hired another party to act on his behalf. 
B) the person who is placed in control over resources that are not his own,with a contractual obligation to use these resources in the interests of some other party. 
C) the person who is placed in control over resources that are not his own and agrees to compensate the resource owner in the event of outcomes that do not satisfy the resource owner. 
D) the person who places his resources in professional hands in exchange for the professional's promise to act on the resource owner's behalf. 
A) the owner of a resource that has hired another party to act on his behalf. 
B) the person who is placed in control over resources that are not his own,with a contractual obligation to use these resources in the interests of some other party. 
C) the person who is placed in control over resources that are not his own and agrees to compensate the resource owner in the event of outcomes that do not satisfy the resource owner. 
D) the person who places his resources in professional hands in exchange for the professional's promise to act on the resource owner's behalf.

Question 2

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 3

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

Accepted Answer

A) True 
 B)False

Question 4

Adverse selection occurs in the market for used cars because used car buyers

Accepted Answer

A) have more information than used car sellers. 
B) have less information than used car sellers. 
C) have less incentive to maintain the value of their cars than new car buyers. 
D) tend to have more accidents than new car buyers. 
A) have more information than used car sellers. 
B) have less information than used car sellers. 
C) have less incentive to maintain the value of their cars than new car buyers. 
D) tend to have more accidents than new car buyers.

Question 5

All of the following are part of the "regulation of health insurance" provision of the Patient Protection and Affordable Care Act (PPACA)except

Accepted Answer

A) individuals with pre-existing medical conditions will be able to acquire health insurance. 
B) all policies must provide coverage for dependant children up to age 26. 
C) lifetime dollar maximums on coverage will be prohibited. 
D) limits on the size of deductibles and on waiting periods before coverage takes effect will be eliminated. 
A) individuals with pre-existing medical conditions will be able to acquire health insurance. 
B) all policies must provide coverage for dependant children up to age 26. 
C) lifetime dollar maximums on coverage will be prohibited. 
D) limits on the size of deductibles and on waiting periods before coverage takes effect will be eliminated.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Of the following high-income countries,which has the lowest mortality ratio for cancer?

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 8

The health care system in Canada is referred to as ________,and is a system in which the government provides national health insurance to all Canadian residents.

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 9

All of the following are part of the "state health exchanges" provision of the Patient Protection and Affordable Care Act (PPACA)except

Accepted Answer

A) each state is required to establish an Affordable Insurance Exchange by 2014. 
B) small businesses with fewer than 50 employees will be exempt from being required to participate in the program. 
C) low-income individuals will be eligible for tax credits to offset the costs of buying health insurance. 
D) health insurance policies that meet certain specified requirements will be offered by state-run agencies or by non-profit firms. 
A) each state is required to establish an Affordable Insurance Exchange by 2014. 
B) small businesses with fewer than 50 employees will be exempt from being required to participate in the program. 
C) low-income individuals will be eligible for tax credits to offset the costs of buying health insurance. 
D) health insurance policies that meet certain specified requirements will be offered by state-run agencies or by non-profit firms.

Question 10

In the United States in 2010,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) 49%. 
C) 68%. 
D) 99%. 
A) 29%. 
B) 49%. 
C) 68%. 
D) 99%.

Question 11

On average,people in the United States spend a greater percentage of their income on health care than do people in most other countries.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not an advantage to an insurance company of insuring a large group of people for health insurance?

Accepted Answer

A) The characteristics of a large group are likely to reflect those of the entire population. 
B) It is easier to accurately predict the number of claims for a group than for an individual. 
C) When all group members pay the premium,the problem of moral hazard is reduced. 
D) When all group members pay the premium,the problem of adverse selection is reduced. 
A) The characteristics of a large group are likely to reflect those of the entire population. 
B) It is easier to accurately predict the number of claims for a group than for an individual. 
C) When all group members pay the premium,the problem of moral hazard is reduced. 
D) When all group members pay the premium,the problem of adverse selection is reduced.

Question 13

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 14

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 15

Explain what is sometimes referred to as the "adverse selection death spiral" as it pertained to the collapse of the California health insurance exchange.

Accepted Answer

With the California health insurance exc

Question 16

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

Accepted Answer

A) correctly pricing their insurance. 
B) sunk costs. 
C) adverse selection. 
D) excess demand for their insurance. 
A) correctly pricing their insurance. 
B) sunk costs. 
C) adverse selection. 
D) excess demand for their insurance.

Question 17

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

Accepted Answer

A) one third as much as 
B) twice as much as 
C) six times greater than 
D) forty times greater than 
A) one third as much as 
B) twice as much as 
C) six times greater than 
D) forty times greater than

Question 18

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 19

Suppose you see a 2006 Scion xB Sport Wagon advertised in the local newspaper for $8,500.If you knew the car was reliable,you would be willing to pay $10,000 for it.If you knew the car was unreliable,you would only be willing to pay $5,500 for it.Under what circumstances should you buy the car?

Accepted Answer

Because of the lemons problem you should

Question 20

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

Accepted Answer

A) slightly lower than 
B) significantly higher than 
C) significantly lower than 
D) comparable to 
A) slightly lower than 
B) significantly higher than 
C) significantly lower than 
D) comparable to

In the principal-agent relationship,the agent is

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.

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

Adverse selection occurs in the market for used cars because used car buyers

All of the following are part of the "regulation of health insurance" provision of the Patient Protection and Affordable Care Act (PPACA)except

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

Of the following high-income countries,which has the lowest mortality ratio for cancer?

The health care system in Canada is referred to as ________,and is a system in which the government provides national health insurance to all Canadian residents.

All of the following are part of the "state health exchanges" provision of the Patient Protection and Affordable Care Act (PPACA)except

In the United States in 2010,the percentage of firms that employed more than 200 workers and offered health insurance as a fringe benefit to the workers was about

On average,people in the United States spend a greater percentage of their income on health care than do people in most other countries.

Which of the following is not an advantage to an insurance company of insuring a large group of people for health insurance?

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

Explain what is sometimes referred to as the "adverse selection death spiral" as it pertained to the collapse of the California health insurance exchange.

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

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

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

Suppose you see a 2006 Scion xB Sport Wagon advertised in the local newspaper for $8,500.If you knew the car was reliable,you would be willing to pay $10,000 for it.If you knew the car was unreliable,you would only be willing to pay $5,500 for it.Under what circumstances should you buy the car?

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

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage,international Trade,and Exchange Rates

Filters

Exam 5: The Economics of Health Care

In the principal-agent relationship,the agent is

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.

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

Adverse selection occurs in the market for used cars because used car buyers

All of the following are part of the "regulation of health insurance" provision of the Patient Protection and Affordable Care Act (PPACA)except

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

Of the following high-income countries,which has the lowest mortality ratio for cancer?

The health care system in Canada is referred to as ________,and is a system in which the government provides national health insurance to all Canadian residents.

All of the following are part of the "state health exchanges" provision of the Patient Protection and Affordable Care Act (PPACA)except

In the United States in 2010,the percentage of firms that employed more than 200 workers and offered health insurance as a fringe benefit to the workers was about

On average,people in the United States spend a greater percentage of their income on health care than do people in most other countries.

Which of the following is not an advantage to an insurance company of insuring a large group of people for health insurance?

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

Explain what is sometimes referred to as the "adverse selection death spiral" as it pertained to the collapse of the California health insurance exchange.

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

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

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

Suppose you see a 2006 Scion xB Sport Wagon advertised in the local newspaper for $8,500.If you knew the car was reliable,you would be willing to pay $10,000 for it.If you knew the car was unreliable,you would only be willing to pay $5,500 for it.Under what circumstances should you buy the car?

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

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Market Efficiency and Market Failure

Firms, the Stock Market, and Corporate Governance

Consumer Choice and Elasticity

Technology,production,and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust Policy

Monopolistic Competition and Oligopoly

GDP: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Comparative Advantage,international Trade,and Exchange Rates

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.