Question 1

The table gives supply and demand data for a certain elective surgical procedure. If suppliers provide the quantity of health care demanded and insurance pays 50 percent of the remaining equilibrium price after a $1,000 deductible is satisfied, the quantity of health care demanded will be

Accepted Answer

A)  4,000.
B)  7,000.
C)  11,000.
D)  16,000.E) A) and B)
F) A) and C)

Question 2

Refer to the graph for the health care market. The marginal cost of health care would be greater than the marginal benefit if the quantity consumed were

Accepted Answer

A)  100.
B)  200.
C)  300.
D)  400.E) A) and C)
F) B) and D)

Question 3

Aggregate U.S. health care spending in 2017 was approximately

Accepted Answer

A)  5.2 percent of domestic output (GDP) .
B)  13.1 percent of domestic output (GDP) .
C)  17.9 percent of domestic output (GDP) .
D)  21 percent of domestic output (GDP) .E) B) and D)
F) B) and C)

Question 4

Health care expenditures coming directly out of consumers' pockets, primarily in the form of deductibles and copayments, account for what percentage of U.S. health care spending?

Accepted Answer

A)  18 percent
B)  35 percent
C)  44 percent
D)  21 percentE) C) and D)
F) A) and C)

Question 5

Refer to the demand and supply diagram, which relates to the health care market. If suppliers provide whatever quantity of health care is demanded, health care insurance causes

Accepted Answer

A)  resources to be underallocated to the health care industry.
B)  resources to be overallocated to the health care industry.
C)  health care to be underconsumed.
D)  the price of health care to the insured to be higher than the market price.E) A) and B)
F) None of the above

Question 6

Why is there an asymmetric information problem in the market for health care?

Accepted Answer

A)  The patient, not the physician, knows most about the amount and type of health care to be provided.
B)  The government, not the physician, knows most about the amount and type of health care to be provided.
C)  Insurance companies, not the physician, know most about the type of health care to be provided.
D)  The physician, not the patient, knows most about the amount and type of health care to be provided.E) C) and D)
F) None of the above

Question 7

One of the special features of the health care market is asymmetric information. Which of the following is not characteristic of asymmetric information?

Accepted Answer

A)  The doctor (supplier) tells the patient (demander) what to purchase
B)  Buyers have little understanding of services they are asked to consume
C)  Fee-for-pay arrangements lead to excessive quantities of services prescribed
D)  Consumers pay lower out-of-pocket costsE) All of the above
F) A) and D)

Question 8

What are the two major problems facing the health care system of the United States?

Accepted Answer

A)  the inadequate supply of physicians and the need to build more hospitals
B)  increasing the demand for and supply of health care
C)  the rapid rate of technological change and an unhealthy population
D)  the need to control costs and make health care accessibleE) A) and B)
F) All of the above

Question 9

Which of the following financed the largest share of health care spending in the U.S. in 2017?

Accepted Answer

A)  Medicare
B)  Medicaid
C)  copayments and deductions paid by patients
D)  military and other public insurance (excl. Medicare and Medicaid) E) None of the above
F) B) and C)

Question 10

In what ways does the United States have the best health care system in the world?

Accepted Answer

There is general agreement that medical ...

Question 11

Singapore's health care system is identified by critics of the PPACA as one good alternative system to study and emulate. Singapore does not have which of the following characteristics?

Accepted Answer

A)  Singapore has among the world's lowest infant mortality rates.
B)  Singapore spends about the same on health care per person as the U.S., but, unlike the U.S., it ranks among the top in every health-quality category monitored by the World Health Organization.
C)  Singapore has among the world's highest life expectancies.
D)  Singapore spends less than 5 percent of its GDP on health care.E) B) and D)
F) B) and C)

Question 12

The table shows the hypothetical demand and supply schedule for health care. If there was no health insurance, the equilibrium price and quantity of health care would be

Accepted Answer

A)  $600 and 300 units.
B)  $400 and 400 units.
C)  $500 and 400 units.
D)  $400 and 500 units.E) B) and D)
F) All of the above

Question 13

What health care program provides payment for medical benefits to certain low-income people, including the blind, the elderly, persons with disabilities, children, and adults with dependent children?

Accepted Answer

A)  Medicaid
B)  Medicare
C)  HMOs
D)  PPOsE) B) and D)
F) C) and D)

Question 14

Refer to the graph of a hypothetical market for health care. What would be the difference between the marginal cost and the marginal benefit of health care when the 450th unit is consumed?

Accepted Answer

A)  $10
B)  $20
C)  $40
D)  $60E) C) and D)
F) A) and B)

Question 15

The Patient Protection and Affordable Care Act (PPACA) includes the establishment of "insurance exchanges" in each state, the purpose of which is to

Accepted Answer

A)  create a monopoly or oligopoly of insurance companies in each state.
B)  fix insurance premiums, similar to public utilities.
C)  foster competition among insurance companies.
D)  nationalize the insurance industry in each state.E) A) and C)
F) A) and B)

Question 16

The availability of health insurance tends to

Accepted Answer

A)  decrease the quantity of health care demanded and cause an underallocation of resources to the health care industry.
B)  increase the quantity of health care demanded and cause an underallocation of resources to the health care industry.
C)  increase the quantity of health care demanded and cause an overallocation of resources to the health care industry.
D)  decrease the quantity of health care demanded and cause an overallocation of resources to the health care industry.E) C) and D)
F) A) and D)

Question 17

Some low-income workers are not covered by Medicaid because of the income that they are earning from their jobs.

Accepted Answer

A) True 
 B)False

Question 18

Refer to the diagram. Economists would argue that health care should be provided to patients in

Accepted Answer

A)  some amount less than Q₁.
B)  amount Q₁.
C)  some amount between Q₁ and Q₂.
D)  amount Q₂.E) All of the above
F) A) and D)

Question 19

What was the employer mandate in the PPACA. How did firms respond to this?

Accepted Answer

The employer mandate was the requirement...

Question 20

The Patient Protection and Affordable Care Act requires all firms to purchase health insurance for their employees or pay a $2,000 fine.

Accepted Answer

A) True 
 B)False

Exam 24: Health Care

One of the special features of the health care market is asymmetric information. Which of the following is not characteristic of asymmetric information?

Correct AnswerverifiedShow Answer

Refer to the demand and supply diagram, which relates to the health care market. If suppliers provide whatever quantity of health care is demanded, health care insurance causes

Correct AnswerverifiedShow Answer

In what ways does the United States have the best health care system in the world?

Correct AnswerverifiedThere is general agreement that medical ...View AnswerShow Answer

What are the two major problems facing the health care system of the United States?

Correct AnswerverifiedShow Answer

The Patient Protection and Affordable Care Act (PPACA) includes the establishment of "insurance exchanges" in each state, the purpose of which is to

Correct AnswerverifiedShow Answer

The table gives supply and demand data for a certain elective surgical procedure. If suppliers provide the quantity of health care demanded and insurance pays 50 percent of the remaining equilibrium price after a $1,000 deductible is satisfied, the quantity of health care demanded will be

Correct AnswerverifiedShow Answer

Which of the following financed the largest share of health care spending in the U.S. in 2017?

Correct AnswerverifiedShow Answer

The table shows the hypothetical demand and supply schedule for health care. If there was no health insurance, the equilibrium price and quantity of health care would be

Correct AnswerverifiedShow Answer

Refer to the graph of a hypothetical market for health care. What would be the difference between the marginal cost and the marginal benefit of health care when the 450th unit is consumed?

Correct AnswerverifiedShow Answer

Why is there an asymmetric information problem in the market for health care?

Correct AnswerverifiedShow Answer

Singapore's health care system is identified by critics of the PPACA as one good alternative system to study and emulate. Singapore does not have which of the following characteristics?

Correct AnswerverifiedShow Answer

Aggregate U.S. health care spending in 2017 was approximately

Correct AnswerverifiedShow Answer

The availability of health insurance tends to

Correct AnswerverifiedShow Answer

Some low-income workers are not covered by Medicaid because of the income that they are earning from their jobs.

Correct AnswerverifiedShow Answer

Refer to the diagram. Economists would argue that health care should be provided to patients in

Correct AnswerverifiedShow Answer

Refer to the graph for the health care market. The marginal cost of health care would be greater than the marginal benefit if the quantity consumed were

Correct AnswerverifiedShow Answer

What health care program provides payment for medical benefits to certain low-income people, including the blind, the elderly, persons with disabilities, children, and adults with dependent children?

Correct AnswerverifiedShow Answer

The Patient Protection and Affordable Care Act requires all firms to purchase health insurance for their employees or pay a $2,000 fine.

Correct AnswerverifiedShow Answer

What was the employer mandate in the PPACA. How did firms respond to this?

Correct AnswerverifiedThe employer mandate was the requirement...View AnswerShow Answer

Health care expenditures coming directly out of consumers' pockets, primarily in the form of deductibles and copayments, account for what percentage of U.S. health care spending?

Correct AnswerverifiedShow Answer

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The employer mandate was the requirement...
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