Question 1

Some economists believe that by making health care coverage mandatory for all individuals,the demand for medical services will likely ________,which will ________ the costs of health care.

Accepted Answer

A) increase;increase 
B) increase;decrease 
C) decrease;increase 
D) decrease;decrease

Question 2

What is moral hazard?

Accepted Answer

The answer of What is moral hazard?...

Question 3

How can improvements in health increase a country's total income?

Accepted Answer

The answer of How can improvements in health increase a...

Question 4

What is adverse selection?

Accepted Answer

The answer of What is adverse selection?...

Question 5

The term that is used to refer to a situation in which one party to an economic transaction has less information than the other party is

Accepted Answer

A) inefficient market hypothesis. 
B) moral hazard. 
C) information disparity. 
D) asymmetric information.

Question 6

In the United States in 2009,the percentage of people without any form of health insurance was about

Accepted Answer

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

Question 7

Consider a used car market in which half the cars are good and half are bad (lemons).A rational buyer in this market should

Accepted Answer

A) offer to pay a price equal to the most she would pay for a good car. 
B) offer to pay a price equal to the most she would pay for a lemon. 
C) offer to pay a price somewhere between the price she would pay for a good car and the price she would pay for a lemon. 
D) save up and buy a new car.

Question 8

Consider a used car market in which half the cars are good and half are bad (lemons).If buyers are rational,the prices being offered for used cars will result in

Accepted Answer

A) an equal proportion of a good cars and lemons being sold in an efficient market. 
B) a larger proportion of good cars being sold and consequently,consumer surplus is increased. 
C) a larger proportion of lemons being sold and consequently,producer surplus is increased. 
D) an equal proportion of good cars and lemons being sold in an inefficient market.

Question 9

The Patient Protection and Affordable Care Act (PPACA)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 10

Which of the following reforms could potentially reduce spending on health care without reducing the effectiveness of health care received?

Accepted Answer

A) nationalize health care so that all health services are government funded and operated 
B) give every citizen a fixed amount of money that can only be spent on health care services 
C) reimburse consumers for preventive health care expenditures so as to avoid costly emergency medical treatments in the future 
D) standardize the tax treatment of employer-based health insurance benefits and private spending on health care

Question 11

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

Accepted Answer

A) pharmaceutical firms and health insurance firms will pay a new taxes. 
B) investors earning more than $200,000 will pay a new tax on their investment income. 
C) beginning in 2018,all taxes on employer-provided health insurance plans will be reduced or eliminated. 
D) workers earning more than $200,000 will have their share of the Medicare payroll tax increase.

Question 12

The overall decline in death rates in the United States since 1981 was due to all of the following except

Accepted Answer

A) a decline in smoking. 
B) the decline in the population. 
C) the availability of new prescription drugs. 
D) new surgical techniques.

Question 13

In the United States in 2009,over 90 percent of people without health insurance were below the age of 34.

Accepted Answer

A) True 
 B)False

Question 14

Between 1981 and 2009,the overall mortality rate in the United States

Accepted Answer

A) decreased by more than 25 percent. 
B) slowly but steadily increased. 
C) remained fairly constant. 
D) was similar to the average rate in most low-income countries.

Question 15

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 16

What is adverse selection?

Accepted Answer

A) It refers to the private,self-interested actions people that people pursue,which when taken collectively leads to a loss in economic surplus. 
B) It refers to the actions people take after they have entered into a transaction that make the other party to the transaction worse off. 
C) It refers to the situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction. 
D) It refers to the actions people take before they enter into a transaction so as to mislead the other party to the transaction.

Question 17

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

Exam 5: The Economics of Health Care

Some economists believe that by making health care coverage mandatory for all individuals,the demand for medical services will likely ,which will the costs of health care.

What is moral hazard?

How can improvements in health increase a country's total income?

What is adverse selection?

The term that is used to refer to a situation in which one party to an economic transaction has less information than the other party is

In the United States in 2009,the percentage of people without any form of health insurance was about

Consider a used car market in which half the cars are good and half are bad (lemons) .A rational buyer in this market should

Consider a used car market in which half the cars are good and half are bad (lemons) .If buyers are rational,the prices being offered for used cars will result in

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

Which of the following reforms could potentially reduce spending on health care without reducing the effectiveness of health care received?

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

The overall decline in death rates in the United States since 1981 was due to all of the following except

In the United States in 2009,over 90 percent of people without health insurance were below the age of 34.

Between 1981 and 2009,the overall mortality rate in the United States

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?

What is adverse selection?

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.