Question 1

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,

Accepted Answer

A)  moral hazard is reduced. 
B)  adverse selection problems are reduced. 
C)  asymmetric information issues are eliminated. 
D)  negative externalities become more pronounced.

Question 2

In the United States in 2009,the percentage of people with private health insurance was about

Accepted Answer

A)  17%. 
B)  29%. 
C)  54%. 
D)  83%.

Question 3

The average height of adult males in the United States

Accepted Answer

A)  has steadily increased since the early 1700s. 
B)  has remained very constant since the Civil War. 
C)  rose significantly beginning in 1830. 
D)  declined in the mid-1800s before beginning to rise again around 1890.

Question 4

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

Question 5

In markets with asymmetric information,

Accepted Answer

A)  moral hazard causes adverse selection which in turn causes asymmetric information. 
B)  adverse selection causes moral hazard which in turn causes asymmetric information. 
C)  asymmetric information causes moral hazard and then it causes adverse selection. 
D)  asymmetric information causes adverse selection and then it causes moral hazard.

Question 6

In which of the following countries are substantial co-payments typically required as a part of the health care system?

Accepted Answer

A)  Canada and the United States 
B)  Japan and Canada. 
C)  the United States and Japan 
D)  the United States and the United Kingdom

Question 7

What is the principal-agent problem?

Accepted Answer

A)  It is a problem caused by a person (principal) who hires an agent to act on his behalf but is unwilling to delegate authority to the agent to carry out the task in the best possible way. 
B)  It is a problem caused by agents pursuing their own interests rather than the interests of the principals who hired them. 
C)  It is a problem of the power system of boss and subordinate where the boss (principal) exerts influence over his subordinates (agents) using punishment or threat. 
D)  It is a problem that exists when a person (principal) has more information about the task than the agent he hires to perform the task.

Question 8

What has happened to health care's share of gross domestic product in the United States since 1965? How does this compare to what has happened to out-of-pocket spending on health care as a percentage of all spending on health care?

Accepted Answer

The answer of What has happened to health care's share...

Question 9

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

The answer of Explain what is sometimes referred to as...

Question 10

Of the following high-income countries,which has the highest infant mortality rate?

Accepted Answer

A)  Canada 
B)  Japan 
C)  the United Kingdom 
D)  the United States

Question 11

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

Accepted Answer

A)  the problem of adverse selection. 
B)  the moral hazard problem. 
C)  sunk costs. 
D)  asymmetric information.

Question 12

Under the Patient Protection and Affordable Care Act (PPACA),insurance companies will be required to participate in a high-risk pool that will cover individuals with pre-existing medical conditions.

Accepted Answer

A) True 
 B)False

Question 13

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.

Accepted Answer

A) True 
 B)False

Question 14

Better health allows people to work harder,which raises a country's total income.This indicates that in effect,better health

Accepted Answer

A)  is a primary cause of price increases. 
B)  reduces the incentive to work. 
C)  shifts out a country's production possibilities frontier. 
D)  increases consumer surplus.

Question 15

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

Accepted Answer

A)  the cost of malpractice insurance 
B)  the cost to treat uninsured patients 
C)  slow growth in labor productivity in health care 
D)  the cost of malpractice lawsuit settlements

Question 16

Vaccinating people against a communicable disease such as influenza not only reduces the chances that the person vaccinated will catch the disease but also reduces the probability that an epidemic of the disease will occur.Which of the following statements is true?

Accepted Answer

A)  Reducing the chances that the person vaccinated will catch the disease is a private cost while reducing the probability of an influenza epidemic is a social benefit. 
B)  Vaccinating people against communicable diseases yields private benefits in excess of social benefits. 
C)  Reducing the chances that the person vaccinated will catch the disease is a private benefit while reducing the probability of an influenza epidemic is a social benefit. 
D)  The benefits of the influenza vaccination outweigh the costs.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

An insurance company is likely to attract customers like Clancy who want to purchase insurance because he knows better that the company that he is more likely to make a claim on a policy.What is the term used to describe the situation above?

Accepted Answer

A)  moral hazard 
B)  adverse selection 
C)  asymmetric information 
D)  economic irrationality

Question 19

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 20

Because consumers who have insurance provided by their employers usually only pay a deductible for a visit to the doctor's office,

Accepted Answer

A)  employers have more incentive to allow employees time off for doctor visits. 
B)  doctors have less incentive to control their costs. 
C)  insurance companies have more incentive to approve medical procedures for their policy holders. 
D)  consumers have less incentive to visit the doctor's office on a more frequent basis.

Exam 5: The Economics of Health Care

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,

In the United States in 2009,the percentage of people with private health insurance was about

The average height of adult males in the United States

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

In markets with asymmetric information,

In which of the following countries are substantial co-payments typically required as a part of the health care system?

What is the principal-agent problem?

What has happened to health care's share of gross domestic product in the United States since 1965? How does this compare to what has happened to out-of-pocket spending on health care as a percentage of all spending on health care?

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

Of the following high-income countries,which has the highest infant mortality rate?

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

Under the Patient Protection and Affordable Care Act (PPACA),insurance companies will be required to participate in a high-risk pool that will cover individuals with pre-existing medical conditions.

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.

Better health allows people to work harder,which raises a country's total income.This indicates that in effect,better health

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

Vaccinating people against a communicable disease such as influenza not only reduces the chances that the person vaccinated will catch the disease but also reduces the probability that an epidemic of the disease will occur.Which of the following statements is true?

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

An insurance company is likely to attract customers like Clancy who want to purchase insurance because he knows better that the company that he is more likely to make a claim on a policy.What is the term used to describe the situation above?

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

Because consumers who have insurance provided by their employers usually only pay a deductible for a visit to the doctor's office,