Question 1

Preferred provider organizations (PPOs) are a type of managed-care organization.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following terms best characterizes the demand for health care?

Accepted Answer

A)  price elastic
B)  price inelastic
C)  income inelastic
D)  negative cross elasticityE) A) and B)
F) A) and C)

Question 3

Medicare and Medicaid set their payment rates for medical services above marginal cost, but below average total cost.One major consequence of doing this is that hospitals and other providers are then

Accepted Answer

A)  reducing the amount of health care services they provide.
B)  passing the uncovered costs on to patients with private health insurance.
C)  denying services to many Medicare and Medicaid patients.
D)  filing for bankruptcy regularly.E) A) and C)
F) B) and C)

Question 4

The Patient Protection and Affordable Care Act (PPACA) bans the previous practice of insurance companies to deny coverage based on preexisting conditions.

Accepted Answer

A) True 
 B)False

Question 5

Health insurance induces consumers to adopt less prevention and overconsumption of health care.

Accepted Answer

A) True 
 B)False

Question 6

In recent decades, the cost of health care has

Accepted Answer

A)  risen fast due to both rising prices and increasing quantities of services consumed.
B)  risen solely because of rising prices of health care goods and services.
C)  remained somewhat stable due to rising prices but falling quantities of services consumed.
D)  risen solely because of rising quantities of medical goods and services consumed.E) C) and D)
F) B) and C)

Question 7

Singapore's health care system includes the following major elements, except

Accepted Answer

A)  government mandates designed to promote competition on price and quality among health care providers.
B)  high out-of-pocket costs to consumers.
C)  laws requiring people to save for future health expenditures.
D)  a national health insurance plan for its citizens provided by the government.E) None of the above
F) B) and C)

Question 8

Which of the following factors is not a reason why competitive pricing has not developed in the health care industry?

Accepted Answer

A)  The government bans competitive pricing in health care.
B)  Consumers rarely shop around for health care providers.
C)  Insurance covers most consumers' cost of health care.
D)  Consumers are often wary of low prices in health care.E) A) and D)
F) None of the above

Question 9

The health care industry currently absorbs about 17.5 percent of U.S.gross domestic product.

Accepted Answer

A) True 
 B)False

Question 10

The increased practice of "defensive medicine" is a consequence of

Accepted Answer

A)  professional board licensing requirements.
B)  the threat of medical lawsuits.
C)  incentives given by drug companies.
D)  an Act passed by Congress.E) A) and D)
F) C) and D)

Question 11

Medicare is the nationwide federal health care program available to Social Security beneficiaries and the disabled.

Accepted Answer

A) True 
 B)False

Question 12

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) B) and C)
F) C) and D)

Question 13

About what percentage of total health care spending went to doctors and hospitals (excluding nursing homes)  in 2014?

Accepted Answer

A)  67 percent
B)  52 percent
C)  33 percent
D)  21 percentE) None of the above
F) All of the above

Question 14

In recent decades, health care expenditures in the U.S.have been rising in absolute terms, but falling as a percentage of GDP.

Accepted Answer

A) True 
 B)False

Question 15

The prominence of employer-provided health insurance in the U.S.has had the following major consequences, except

Accepted Answer

A)  overuse of health care services.
B)  rapidly rising prices of health care.
C)  reform efforts have mostly focused on regulation of health insurance.
D)  heightened awareness of employees about the true costs of their health care.E) A) and D)
F) B) and D)

Question 16

A major implication of asymmetric information is that

Accepted Answer

A)  health care suppliers may reduce the supply of health care.
B)  health care suppliers may increase the demand for health care.
C)  collusion between health care suppliers and purchasers may accelerate the rise in costs.
D)  resources may be underallocated to the health care industry.E) B) and C)
F) A) and D)

Question 17

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) A) and C)
F) B) and C)

Question 18

The main focus of the Patient Protection and Affordable Care Act (PPACA) is the provision of health insurance coverage to all Americans.

Accepted Answer

A) True 
 B)False

Question 19

Suppose you go to a doctor but your health insurance plan does not reimburse you because you have not yet paid enough out of pocket for the year to qualify for insurance benefits.This is an example of

Accepted Answer

A)  coinsurance.
B)  a deductible.
C)  monopsony power.
D)  a deferred benefit plan.E) A) and D)
F) None of the above

Question 20

The price of medical care in the United States has

Accepted Answer

A)  remained relatively unchanged in recent years.
B)  risen slower than the overall price level.
C)  risen at the same pace as the overall price level.
D)  risen faster than the overall price level.E) All of the above
F) None of the above

Exam 24: Health Care

Suppose you go to a doctor but your health insurance plan does not reimburse you because you have not yet paid enough out of pocket for the year to qualify for insurance benefits.This is an example of

Correct AnswerverifiedShow Answer

Preferred provider organizations (PPOs) are a type of managed-care organization.

Correct AnswerverifiedShow Answer

Singapore's health care system includes the following major elements, except

Correct AnswerverifiedShow Answer

Which of the following terms best characterizes the demand for health care?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The main focus of the Patient Protection and Affordable Care Act (PPACA) is the provision of health insurance coverage to all Americans.

Correct AnswerverifiedShow Answer

Medicare and Medicaid set their payment rates for medical services above marginal cost, but below average total cost.One major consequence of doing this is that hospitals and other providers are then

Correct AnswerverifiedShow Answer

The health care industry currently absorbs about 17.5 percent of U.S.gross domestic product.

Correct AnswerverifiedShow Answer

Which of the following factors is not a reason why competitive pricing has not developed in the health care industry?

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

Health insurance induces consumers to adopt less prevention and overconsumption of health care.

Correct AnswerverifiedShow Answer

A major implication of asymmetric information is that

Correct AnswerverifiedShow Answer

The price of medical care in the United States has

Correct AnswerverifiedShow Answer

The prominence of employer-provided health insurance in the U.S.has had the following major consequences, except

Correct AnswerverifiedShow Answer

The Patient Protection and Affordable Care Act (PPACA) bans the previous practice of insurance companies to deny coverage based on preexisting conditions.

Correct AnswerverifiedShow Answer

In recent decades, health care expenditures in the U.S.have been rising in absolute terms, but falling as a percentage of GDP.

Correct AnswerverifiedShow Answer

In recent decades, the cost of health care has

Correct AnswerverifiedShow Answer

About what percentage of total health care spending went to doctors and hospitals (excluding nursing homes) in 2014?

Correct AnswerverifiedShow Answer

Medicare is the nationwide federal health care program available to Social Security beneficiaries and the disabled.

Correct AnswerverifiedShow Answer

The increased practice of "defensive medicine" is a consequence of

Correct AnswerverifiedShow Answer

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