Question 1

Consumers usually pay less than the total cost of medical treatment because

Accepted Answer

A)  a third party, usually an insurance company, often pays most of the bill. 
B)  the federal government pays for most medical procedures. 
C)  competition forces doctors and hospitals to charge prices that do not cover their costs. 
D)  a third party, usually an employer, often pays most of the bill. 
A)  a third party, usually an insurance company, often pays most of the bill. 
B)  the federal government pays for most medical procedures. 
C)  competition forces doctors and hospitals to charge prices that do not cover their costs. 
D)  a third party, usually an employer, often pays most of the bill. A

Question 2

The study of the problems due to asymmetric information was begun when economists analyzed which type of market?

Accepted Answer

A)  the market for citrus fruit 
B)  the market for insurance 
C)  farmers' markets 
D)  the market for automobiles 
A)  the market for citrus fruit 
B)  the market for insurance 
C)  farmers' markets 
D)  the market for automobiles D

Question 3

In the 1973 movie Save the Tiger,Jack Lemmon plays Harry Stoner,the CEO of a clothing manufacturer whose business has fallen on hard times. At one point in the movie,Stoner convinces his partner to hire someone to burn one of their buildings to collect on their insurance policy.What term refers to the information problem that led the insurance company to sell a policy for this building to Stoner and his partner?

Accepted Answer

A)  rational ignorance 
B)  the principal-agent problem 
C)  adverse selection 
D)  moral hazard 
A)  rational ignorance 
B)  the principal-agent problem 
C)  adverse selection 
D)  moral hazard C

Question 4

About ________ of pharmaceutical patents are issued to U.S.firms.

Accepted Answer

A)  10 percent 
B)  one-half 
C)  two-thirds 
D)  90 percent 
A)  10 percent 
B)  one-half 
C)  two-thirds 
D)  90 percent

Question 5

Why is the study of asymmetric information associated with the market for "lemons"?

Accepted Answer

A)  Sellers of citrus fruit - lemons, oranges, grapefruit - know the difference between bad fruit and good fruit; buyers do not have this information. 
B)  Because there is little advertising in the market for lemons, buyers have difficulty determining the quality of lemons before they are purchased. 
C)  Potential buyers of used cars have difficulty separating good used cars from bad used cars; bad used cars are often referred to as "lemons." 
D)  Most sellers of used cars have less information about their cars than the dealers who buy them; used cars are often referred to as "lemons." 
A)  Sellers of citrus fruit - lemons, oranges, grapefruit - know the difference between bad fruit and good fruit; buyers do not have this information. 
B)  Because there is little advertising in the market for lemons, buyers have difficulty determining the quality of lemons before they are purchased. 
C)  Potential buyers of used cars have difficulty separating good used cars from bad used cars; bad used cars are often referred to as "lemons." 
D)  Most sellers of used cars have less information about their cars than the dealers who buy them; used cars are often referred to as "lemons."

Question 6

A goal of ________ is to give patients an incentive to pay more attention to the prices of medical services.This would tend to increase economic efficiency by decreasing the costs of medical services

Accepted Answer

A)  the Patient Protection and Affordable Care Act (PPAC
A)  
B)  market-based reforms of the health care system 
C)  government-provided health care 
D)  socialized medicine 
A)  the Patient Protection and Affordable Care Act (PPAC
A)  
B)  market-based reforms of the health care system 
C)  government-provided health care 
D)  socialized medicine

Question 7

The health care system in ________ is referred to as socialized medicine,under which the government owns most of the hospitals and employs most of the doctors.

Accepted Answer

A)  Canada 
B)  Japan 
C)  the United Kingdom 
D)  the United States 
A)  Canada 
B)  Japan 
C)  the United Kingdom 
D)  the United States

Question 8

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

Accepted Answer

A)  demand; increase 
B)  demand; decrease 
C)  supply; increase 
D)  demand and supply; decrease 
A)  demand; increase 
B)  demand; decrease 
C)  supply; increase 
D)  demand and supply; decrease

Question 9

________ occurs when actions taken by one party to a transaction are different from what the other party expected at the time of the transaction.

Accepted Answer

A)  Adverse selection 
B)  Risk Aversion 
C)  Fraud 
D)  Moral hazard 
A)  Adverse selection 
B)  Risk Aversion 
C)  Fraud 
D)  Moral hazard

Question 10

Which of the following did not contributed to the overall decline in death rates in the United States since 1981?

Accepted Answer

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

Question 11

In which of the following countries does health insurance not pay for most preventive care procedures?

Accepted Answer

A)  Canada 
B)  Japan 
C)  the United Kingdom 
D)  the United States 
A)  Canada 
B)  Japan 
C)  the United Kingdom 
D)  the United States

Question 12

Between 1981 and 2009,deaths from kidney disease increased largely due to the effects of

Accepted Answer

A)  increasing obesity. 
B)  increasing alcohol consumption. 
C)  increased smoking. 
D)  increased pollution. 
A)  increasing obesity. 
B)  increasing alcohol consumption. 
C)  increased smoking. 
D)  increased pollution.

Question 13

What is the term that describes a situation in which one party to an economic transaction has less information than the other party?

Accepted Answer

A)  inefficient market hypothesis 
B)  asymmetric information 
C)  unequal market structure 
D)  monopsony 
A)  inefficient market hypothesis 
B)  asymmetric information 
C)  unequal market structure 
D)  monopsony

Question 14

In the United States in 2010,the percentage of firms that employed more than 200 workers and did not offer health insurance as a fringe benefit to the workers was about

Accepted Answer

A)  1%. 
B)  29%. 
C)  44%. 
D)  99%. 
A)  1%. 
B)  29%. 
C)  44%. 
D)  99%.

Question 15

________ occurs when one party takes advantage of having more information than another party about the attributes of the good or service they will exchange.

Accepted Answer

A)  A negative externality 
B)  Moral hazard 
C)  A transaction cost 
D)  Adverse selection 
A)  A negative externality 
B)  Moral hazard 
C)  A transaction cost 
D)  Adverse selection

Question 16

Under current tax law individuals do not pay taxes on health insurance benefits they receive from their employers.As a result

Accepted Answer

A)  the federal government spends more than it receives in tax revenue. 
B)  individuals are encouraged to want generous health coverage that reduces their incentives to cut costs. 
C)  the quality of health care provided is less than it would be if benefits were taxed. 
D)  politicians are encouraged to raise income and payroll taxes. 
A)  the federal government spends more than it receives in tax revenue. 
B)  individuals are encouraged to want generous health coverage that reduces their incentives to cut costs. 
C)  the quality of health care provided is less than it would be if benefits were taxed. 
D)  politicians are encouraged to raise income and payroll taxes.

Question 17

In 2011,the average life expectancy at birth in the United Kingdom and other high-income countries was around ________ years.

Accepted Answer

A)  60 
B)  70 
C)  80 
D)  90 
A)  60 
B)  70 
C)  80 
D)  90

Question 18

Of the following high-income countries,which has the lowest infant mortality rate?

Accepted Answer

A)  Canada 
B)  Japan 
C)  the United Kingdom 
D)  the United States 
A)  Canada 
B)  Japan 
C)  the United Kingdom 
D)  the United States

Question 19

In the United States,out-of-pocket spending on health care per person

Accepted Answer

A)  has been rising since 1965. 
B)  has been falling since 1965. 
C)  has remained fairly steady since 1965. 
D)  fell from 1965 through 1995, then began to rise from 1995 to the present. 
A)  has been rising since 1965. 
B)  has been falling since 1965. 
C)  has remained fairly steady since 1965. 
D)  fell from 1965 through 1995, then began to rise from 1995 to the present.

Question 20

In the market for insurance,

Accepted Answer

A)  buyers often have more information than sellers. 
B)  sellers often have better information than buyers. 
C)  sellers are protected from lawsuits brought by buyers. 
D)  demand is perfectly inelastic because, by law, home owners and automobile drivers must have insurance. 
A)  buyers often have more information than sellers. 
B)  sellers often have better information than buyers. 
C)  sellers are protected from lawsuits brought by buyers. 
D)  demand is perfectly inelastic because, by law, home owners and automobile drivers must have insurance.

Consumers usually pay less than the total cost of medical treatment because

The study of the problems due to asymmetric information was begun when economists analyzed which type of market?

About ________ of pharmaceutical patents are issued to U.S.firms.

Why is the study of asymmetric information associated with the market for "lemons"?

A goal of ________ is to give patients an incentive to pay more attention to the prices of medical services.This would tend to increase economic efficiency by decreasing the costs of medical services

The health care system in ________ is referred to as socialized medicine,under which the government owns most of the hospitals and employs most of the doctors.

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

________ occurs when actions taken by one party to a transaction are different from what the other party expected at the time of the transaction.

Which of the following did not contributed to the overall decline in death rates in the United States since 1981?

In which of the following countries does health insurance not pay for most preventive care procedures?

Between 1981 and 2009,deaths from kidney disease increased largely due to the effects of

What is the term that describes a situation in which one party to an economic transaction has less information than the other party?

In the United States in 2010,the percentage of firms that employed more than 200 workers and did not offer health insurance as a fringe benefit to the workers was about

________ occurs when one party takes advantage of having more information than another party about the attributes of the good or service they will exchange.

Under current tax law individuals do not pay taxes on health insurance benefits they receive from their employers.As a result

In 2011,the average life expectancy at birth in the United Kingdom and other high-income countries was around ________ years.

Of the following high-income countries,which has the lowest infant mortality rate?

In the United States,out-of-pocket spending on health care per person

In the market for insurance,

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 5: The Economics of Health Care

Consumers usually pay less than the total cost of medical treatment because

The study of the problems due to asymmetric information was begun when economists analyzed which type of market?

About ________ of pharmaceutical patents are issued to U.S.firms.

Why is the study of asymmetric information associated with the market for "lemons"?

A goal of ________ is to give patients an incentive to pay more attention to the prices of medical services.This would tend to increase economic efficiency by decreasing the costs of medical services

The health care system in ________ is referred to as socialized medicine,under which the government owns most of the hospitals and employs most of the doctors.

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

________ occurs when actions taken by one party to a transaction are different from what the other party expected at the time of the transaction.

Which of the following did not contributed to the overall decline in death rates in the United States since 1981?

In which of the following countries does health insurance not pay for most preventive care procedures?

Between 1981 and 2009,deaths from kidney disease increased largely due to the effects of

What is the term that describes a situation in which one party to an economic transaction has less information than the other party?

In the United States in 2010,the percentage of firms that employed more than 200 workers and did not offer health insurance as a fringe benefit to the workers was about

________ occurs when one party takes advantage of having more information than another party about the attributes of the good or service they will exchange.

Under current tax law individuals do not pay taxes on health insurance benefits they receive from their employers.As a result

In 2011,the average life expectancy at birth in the United Kingdom and other high-income countries was around ________ years.

Of the following high-income countries,which has the lowest infant mortality rate?

In the United States,out-of-pocket spending on health care per person

In the market for insurance,

Economics: Foundations and Models

Trade-Offs, comparative Advantage, and the Market System

Where Prices Come From: the Interaction of Demand and Supply

Economic Efficiency, government Price Setting, and Taxes

Firms, the Stock Market, and Corporate Governance

Comparative Advantage and the Gains From International Trade

Gdp: Measuring Total Production and Income

Unemployment and Inflation

Economic Growth, the Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, banks, and the Federal Reserve System

Monetary Policy

Fiscal Policy

Inflation, unemployment, and Federal Reserve Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

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