Question 1

In addition to covering the costs of unpredictable events,health insurance typically covers many planned expenses,such as routine checkups,annual physicals,and the cost of vaccinations.because of this,health insurance

Accepted Answer

A)  discourages overuse of health care services. 
B)  encourages overuse of health care services. 
C)  generates an efficient quantity of health care services. 
D)  is not accepted by most doctors and hospitals.

Question 2

Suppose a large firm allows its employees to choose whether to participate in its health insurance plan.The firm is trying to decide between two plans: Plan I has a low monthly premium but a high deductible,and Plan II has a high monthly premium but a low deductible.Under which plan is adverse selection likely to be a bigger problem?

Accepted Answer

A)  Plan I because it is likely to draw participants who expect high medical costs. This group expects to consume much health care services and therefore prefer low deductibles. 
B)  Plan II because it is likely to draw participants who expect high medical costs. Healthy individuals who do not expect to consume much health care services will not be willing to pay the high premiums. 
C)  Plan I because it is likely to draw the relatively healthy employees who do not expect to spend much on health care. Because the monthly premiums are low, the insurance company has to bear a bigger financial burden in the event of serious illnesses. 
D)  Plan II because it is likely to draw employees who tend to over-consume health care services because of the low deductible. Insurance companies are likely to end up paying out more claims than the premiums they collect.

Question 3

Figure 7-1  Figure 7-1 represents the market for vaccinations. Vaccinations are considered a benefit to society, and the figure shows both the marginal private benefit and the marginal social benefit from vaccinations.
-Refer to Figure 7-1.The market equilibrium quantity is ________ thousand vaccinations.

Accepted Answer

A)  100 
B)  200 
C)  300 
D)  >300

Question 4

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 5

In the United States in 2012,the percentage of people with private health insurance was about

Accepted Answer

A)  17%. 
B)  29%. 
C)  74%. 
D)  83%.

Question 6

The Patient Protection and Affordable Care Act (ACA)is scheduled to be fully implemented by 2019,at which point

Accepted Answer

A)  current budget cuts are expected to have completely offset the cost of the program. 
B)  more than 30 million additional individuals are expected to have health care coverage. 
C)  all hospitals in the United States will be taken over by the federal government. 
D)  private health insurance companies will no longer exist in the United States.

Question 7

One effect of adverse selection in a market is that the equilibrium quantity of the product may
be smaller than it would have been if there were no information problems.

Accepted Answer

A) True 
 B)False

Question 8

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

Question 9

What is moral hazard?

Accepted Answer

The answer of What is moral hazard?...

Exam 7: The Economics of Health Care

In addition to covering the costs of unpredictable events,health insurance typically covers many planned expenses,such as routine checkups,annual physicals,and the cost of vaccinations.because of this,health insurance

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?

In the United States in 2012,the percentage of people with private health insurance was about

The Patient Protection and Affordable Care Act (ACA) is scheduled to be fully implemented by 2019,at which point

One effect of adverse selection in a market is that the equilibrium quantity of the product may be smaller than it would have been if there were no information problems.

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

What is moral hazard?