Question 1

Which of the following factors has contributed to rising health care prices in the United States?

Accepted Answer

A)  The supply of physicians per 100,000 people has decreased since 1975.
B)  Productivity growth in the health care industry has been negative in recent years.
C)  Improvements in medical technology have significantly increased the number of patients that can be treated each year.
D)  The supply of physicians per 100,000 people has risen since 1975, but not as fast as the increase in the demand for physicians' services.E) A) and B)
F) None of the above

Question 2

Which of the following best explains why hospital charges of $25 per aspirin are not unusual?

Accepted Answer

A)  Government payments for Medicare and Medicaid patients do not cover hospitals' fixed costs, so these costs must be distributed to other patients and their private insurance providers.
B)  Government exercises no cost control for Medicare and Medicaid, so hospitals get away with charging those patients $25 for an aspirin.
C)  Pharmaceutical companies have monopoly power over hospitals, allowing them to charge high prices for medications.
D)  Hospitals distribute a medically advanced form of aspirin that costs more to produce.E) None of the above
F) A) and B)

Question 3

The increasing use of part-time and temporary workers can partly be blamed on the rising health care costs to employers.

Accepted Answer

A) True 
 B)False

Question 4

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 one-third of the equilibrium price, there would be a resulting allocative

Accepted Answer

A)  efficiency because, at 7,000 units, the marginal cost to society of $3,000 equals the marginal benefit of $3,000.
B)  efficiency because, at 12,000 units, the marginal cost to society is $4,000 and the marginal benefit is $1,000.
C)  inefficiency because, at 12,000 units, the marginal cost to society is $5,000 and the marginal benefit is $2,000.
D)  inefficiency because, at 12,000 units, the marginal cost to society is $2,000 and the marginal benefit is $5,000.E) All of the above
F) None of the above

Question 5

The table shows the hypothetical demand and supply schedule for health care. If private insurance covers 50 percent of the equilibrium price, how much will the insured pay and what will be their quantity of health care demanded?

Accepted Answer

A)  $400 and 500 units.
B)  $400 and 400 units.
C)  $500 and 400 units.
D)  $200 and 700 units.E) B) and C)
F) A) and C)

Question 6

Major criticisms against the Patient Protection and Affordable Care Act (PPACA) do not include which of the following arguments?

Accepted Answer

A)  It will lead to greater inefficiencies in health care, and overconsumption might even increase.
B)  It is very costly, and the revenue sources cited in the act will not be sufficient to cover future expenses.
C)  It still does not cover everyone in the nation, and there will still be significant numbers of Americans left uninsured.
D)  It might be the first step toward a socialized health insurance system where market forces will have no role in rationing health care.E) A) and C)
F) None of the above

Question 7

Studies in industrially advanced nations indicate that a 3 percent increase in incomes will generate a

Accepted Answer

A)  1 percent increase in the amount of health care demanded.
B)  1.5 percent increase in the amount of health care demanded.
C)  3 percent increase in the amount of health care demanded.
D)  6 percent increase in the amount of health care demanded.E) All of the above
F) B) and D)

Question 8

Describe the costs involved when the uninsured go to the emergency room.

Accepted Answer

The uninsured may wait until their illne...

Question 9

Health maintenance organizations (HMOs)are like health clubs that operate facilities where people can exercise and get physical training.

Accepted Answer

A) True 
 B)False

Question 10

A health care organization that contracts with employers to provide health insurance to their workers, and hires doctors and other groups to provide health care for the workers who are insured is a

Accepted Answer

A)  preferred provider organization.
B)  health maintenance organization.
C)  diagnosis-related group system.
D)  regional health alliance.E) B) and C)
F) All of the above

Question 11

Describe the major spending categories and percentage for health care spending.

Accepted Answer

Total U.S. health care expenditures cons...

Question 12

The health care market is characterized by

Accepted Answer

A)  extensive negative externalities.
B)  significant positive externalities.
C)  perfect knowledge by both buyers and sellers.
D)  a perfectly inelastic demand.E) None of the above
F) A) and C)

Question 13

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) None of the above
F) A) and D)

Question 14

Rising health care costs have contributed to slower growth in real wages of workers.

Accepted Answer

A) True 
 B)False

Question 15

Describe the extent and characteristics of the part of the population with limited access to health care coverage.

Accepted Answer

In 2017, about 9 percent of the populati...

Question 16

Employers in the U.S. started offering health insurance as a fringe benefit to their employees during World War II as a way of getting around the wage controls that were in effect then.

Accepted Answer

A) True 
 B)False

Question 17

A moral hazard problem arises in the health care market because health insurance encourages people to overconsume health care.

Accepted Answer

A) True 
 B)False

Question 18

Refer to the graph for the health care market. A health insurance plan that pays four-fifths of the cost of a consumer's health care leads to

Accepted Answer

A)  overconsumption of health care by 300 units.
B)  overconsumption of health care by 600 units.
C)  overconsumption of health care by 150 units.
D)  a socially efficient consumption level of health care.E) B) and C)
F) C) and D)

Question 19

An increase in the demand for health care would most likely result from

Accepted Answer

A)  healthier lifestyles.
B)  an aging population.
C)  less health insurance coverage.
D)  increased productivity in health care.E) None of the above
F) B) and C)

Question 20

The price elasticity of demand for health care is such that an increase in the price of health care will

Accepted Answer

A)  decrease total health care expenditures.
B)  increase total health care expenditures.
C)  shift the demand for health care rightward.
D)  shift the demand for health care leftward.E) B) and D)
F) C) and D)

Exam 24: Health Care

The table shows the hypothetical demand and supply schedule for health care. If private insurance covers 50 percent of the equilibrium price, how much will the insured pay and what will be their quantity of health care demanded?

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 one-third of the equilibrium price, there would be a resulting allocative

Correct AnswerverifiedShow Answer

Which of the following factors has contributed to rising health care prices in the United States?

Correct AnswerverifiedShow Answer

Which of the following best explains why hospital charges of $25 per aspirin are not unusual?

Correct AnswerverifiedShow Answer

The health care market is characterized by

Correct AnswerverifiedShow Answer

The price elasticity of demand for health care is such that an increase in the price of health care will

Correct AnswerverifiedShow Answer

Refer to the graph for the health care market. A health insurance plan that pays four-fifths of the cost of a consumer's health care leads to

Correct AnswerverifiedShow Answer

Employers in the U.S. started offering health insurance as a fringe benefit to their employees during World War II as a way of getting around the wage controls that were in effect then.

Correct AnswerverifiedShow Answer

Describe the extent and characteristics of the part of the population with limited access to health care coverage.

Correct AnswerverifiedIn 2017, about 9 percent of the populati...View AnswerShow Answer

Describe the costs involved when the uninsured go to the emergency room.

Correct AnswerverifiedThe uninsured may wait until their illne...View AnswerShow Answer

An increase in the demand for health care would most likely result from

Correct AnswerverifiedShow Answer

Studies in industrially advanced nations indicate that a 3 percent increase in incomes will generate a

Correct AnswerverifiedShow Answer

The increasing use of part-time and temporary workers can partly be blamed on the rising health care costs to employers.

Correct AnswerverifiedShow Answer

Rising health care costs have contributed to slower growth in real wages of workers.

Correct AnswerverifiedShow Answer

Major criticisms against the Patient Protection and Affordable Care Act (PPACA) do not include which of the following arguments?

Correct AnswerverifiedShow Answer

Health maintenance organizations (HMOs)are like health clubs that operate facilities where people can exercise and get physical training.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A moral hazard problem arises in the health care market because health insurance encourages people to overconsume health care.

Correct AnswerverifiedShow Answer

A health care organization that contracts with employers to provide health insurance to their workers, and hires doctors and other groups to provide health care for the workers who are insured is a

Correct AnswerverifiedShow Answer

Describe the major spending categories and percentage for health care spending.

Correct AnswerverifiedTotal U.S. health care expenditures cons...View AnswerShow Answer

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In 2017, about 9 percent of the populati...
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The uninsured may wait until their illne...
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Total U.S. health care expenditures cons...
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