Exam 5: The Economics of Health Care

Suppose you see a 2012 Ford Mustang GT advertised in the local newspaper for $15,000.If you knew the car was reliable,you would be willing to pay $17,000 for it.If you knew the car was unreliable,you would only be willing to pay $12,000 for it.Under what circumstances should you buy the car?

In the United States in 2014,the percentage of people who received health insurance through their employer was about

In the 1973 movie Save the Tiger,Jack Lemmon plays Harry Stoner,the CEO of a clothing manufacturer whose business has fallen on hard times.At one point in the movie,Stoner convinces his partner to hire someone to burn one of their buildings to collect on their insurance policy.What term refers to the information problem that led the insurance company to sell a policy for this building to Stoner and his partner?

In the United States,health care spending as a percentage of GDP has declined since 1965.

The provision of the Patient Protection and Affordable Care Act (ACA)which states that insurance companies are required to participate in a high-risk pool that will insure individuals with pre-existing medical conditions who have been unable to buy health insurance for at least six months is the ________ provision.

A decrease in the availability of lower-cost drugs will tend to shift the ________ curve for medical services to the ________.

In most circumstances,employees pay taxes on the value of health insurance their employers provide them.

One consequence of adverse selection in the market for used cars is that most used cars sold will be lemons.

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

Japan has a single-payer health care system in which the government provides national health insurance to all Japanese residents.

In 2015,infant mortality in the United States was ________ per 1,000 live births.

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.

How can increases in a country's total income improve health?

The situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction is known as adverse selection.

Growth in labor productivity in the economy as a whole has been ________ labor productivity in health care.

In a market with positive externalities,the market equilibrium quantity will be less than the efficient equilibrium quantity.

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 decrease.

Figure 5-3 Figure 5-3 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 5-3.With insurance and a third-party payer system,the equilibrium quantity of medical services is

Some economists have argued that certain characteristics of the delivery of health care justify government intervention.One of these characteristics is

Typically,the lower the level of income per person in a country,the lower the level of spending per person on health care.This relationship between income and spending indicates that health care is a