Question 1

Rapidly rising U.S.health care costs have:

Accepted Answer

A)   forced the growth of wages to keep pace.
B)   encouraged outsourcing.
C)   caused some employers to use more part-time and temporary workers.
D)   done all of these.E) B) and C)
F) A) and B)

Question 2

Which of the following is a demand-increasing factor in the health care market?

Accepted Answer

A)   Rising incomes.
B)   The aging of the population.
C)   Asymmetric information.
D)   All of these.E) A) and C)
F) B) and C)

Question 3

The fundamental problem associated with the U.S.health care system is that:

Accepted Answer

A)   the financing of health care through insurance has resulted in the underallocation of resources to the health care industry.
B)   frivolous malpractice suits have increased malpractice insurance premiums for doctors.
C)   at the margin,the value of health care services may be less than the value of alternative goods and services.
D)   there are too many general practitioners and not enough specialists.E) A) and B)
F) A) and C)

Question 4

About three-fourths of all health care costs are paid out of pocket by patients.

Accepted Answer

A) True 
 B)False

Question 5

Singapore encourages competition in its health care market by:

Accepted Answer

A)   requiring hospitals to post prices for services and by government publishing hospital performance records.
B)   avoiding any government involvement in the health care market.
C)   operating government-run hospitals to compete directly with private hospitals.
D)   outsourcing all of its health care services to foreign providers.E) A) and B)
F) A) and C)

Question 6

Sam decides to join the Gigantic State University's rugby team when he learns that his health insurance will pay for any subsequent injury.This illustrates:

Accepted Answer

A)   the diagnosis-related-group system.
B)   a "pay or play" system.
C)   the moral hazard problem.
D)   the Coase theorem.E) A) and B)
F) None of the above

Question 7

The demand for health care is highly elastic with respect to both price and income.

Accepted Answer

A) True 
 B)False

Question 8

If labor productivity in the health care industry rises very slowly relative to wages and salaries in the industry,this would tend to:

Accepted Answer

A)   increase the demand for health care.
B)   decrease the demand for health care.
C)   increase the supply of health care.
D)   increase the cost of health care.E) B) and C)
F) A) and C)

Question 9

Economists argue that in treating patients:

Accepted Answer

A)   physicians should use any test or procedures that might help the patient.
B)   health care should not be rationed by physicians because it is an entitlement or right.
C)   both benefits and costs should be taken into account by physicians.
D)   physicians should use any test or procedure whose marginal benefit is positive.E) None of the above
F) A) and B)

Question 10

The employer mandate of the PPACA requires that:

Accepted Answer

A)   every firm must purchase health insurance for their full-time employees or pay a $2,000 fine per employee.
B)   every firm with 50 or more full-time employees must purchase health insurance for their full-time employees or pay a $2,000 fine per employee.
C)   every firm with fewer than 50 full-time employees must purchase health insurance for their full-time employees or pay a $2,000 fine per employee.
D)   every firm with 500 or more employees must establish their own on-site medical facilities to provide employees with basic medical care.E) A) and B)
F) C) and D)

Question 11

If the existence of health insurance increases one's incentive to use the health care system more intensively,this is an illustration of:

Accepted Answer

A)   the adverse selection problem.
B)   the moral hazard problem.
C)   the benefits-received principle.
D)   the Coase theorem.E) A) and D)
F) B) and C)

Question 12

The unemployed are disproportionately represented among the uninsured because:

Accepted Answer

A)   one must be working to qualify for Medicaid.
B)   most workers obtain health insurance through their employers.
C)   most are young and in excellent health,so they choose not to purchase health insurance.
D)   a large percentage of the unemployed are heads of single-parent families.E) C) and D)
F) A) and B)

Question 13

As a percentage of GDP,U.S.health care spending is higher than that of any other major industrial country.

Accepted Answer

A) True 
 B)False

Question 14

One of the provisions of the PPACA is a personal mandate that all individuals:

Accepted Answer

A)   pay a $1,000 deductible and 20 percent co-pay on all medical care except annual check-ups or preventative care.
B)   contribute at least 30 percent of the total cost of employer-provided health insurance.
C)   purchase health insurance for themselves and their dependents unless they are already covered by government or employer-provided insurance.
D)   with preexisting conditions must purchase a specially designated government insurance plan.E) A) and C)
F) B) and C)

Question 15

Technological progress in the health care industry has typically reduced costs and increased supply.

Accepted Answer

A) True 
 B)False

Question 16

Health care costs have greatly increased in recent years in the United States.This fact alone does not establish an overallocation of resources to health care because:

Accepted Answer

A)   the benefits of health care have also greatly increased in recent years.
B)   rising medical care prices have inflated health care costs.
C)   the marginal cost of health care exceeds the average total cost of health care.
D)   negative externalities sometimes result from additional health care spending.E) None of the above
F) C) and D)

Question 17

Because of health insurance,resources are underallocated to the health care industry.

Accepted Answer

A) True 
 B)False

Question 18

Preferred provider organizations (PPOs) :

Accepted Answer

A)   charge a fixed amount per member,hire many of their own physicians,and provide health services only to members.
B)   require that their members give up the right to file medical malpractice suits.
C)   are illegal in several states.
D)   require physicians and hospitals to provide discounted prices for their services as a condition for being included in the insurance plan.E) A) and D)
F) A) and C)

Question 19

Which of the following is not one of the new taxes imposed under the PPACA?

Accepted Answer

A)   2.9 percent excise tax on medical devices.
B)   10 percent tax on indoor tanning.
C)   3.8 percent tax on "junk food."
D)   40 percent tax on employers providing insurance to employees in excess of $10,200 per year for individuals or $27,500 per year for families.E) All of the above
F) C) and D)

Question 20

Whole Foods Market's personal wellness accounts for employees:

Accepted Answer

A)   create significant moral hazard in the purchase of health care services.
B)   provide bonus payments for employees meeting certain health criteria and participating in company wellness activities.
C)   encourage employees to consider the opportunity costs of their medical spending.
D)   encourage employees to overspend for health care as they view it as "free money."E) None of the above
F) B) and D)

Exam 23: Health Care

As a percentage of GDP,U.S.health care spending is higher than that of any other major industrial country.

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The unemployed are disproportionately represented among the uninsured because:

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The demand for health care is highly elastic with respect to both price and income.

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The employer mandate of the PPACA requires that:

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Preferred provider organizations (PPOs) :

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The fundamental problem associated with the U.S.health care system is that:

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One of the provisions of the PPACA is a personal mandate that all individuals:

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Rapidly rising U.S.health care costs have:

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If the existence of health insurance increases one's incentive to use the health care system more intensively,this is an illustration of:

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About three-fourths of all health care costs are paid out of pocket by patients.

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Technological progress in the health care industry has typically reduced costs and increased supply.

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Because of health insurance,resources are underallocated to the health care industry.

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Which of the following is a demand-increasing factor in the health care market?

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Health care costs have greatly increased in recent years in the United States.This fact alone does not establish an overallocation of resources to health care because:

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Sam decides to join the Gigantic State University's rugby team when he learns that his health insurance will pay for any subsequent injury.This illustrates:

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If labor productivity in the health care industry rises very slowly relative to wages and salaries in the industry,this would tend to:

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Whole Foods Market's personal wellness accounts for employees:

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Singapore encourages competition in its health care market by:

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Which of the following is not one of the new taxes imposed under the PPACA?

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Economists argue that in treating patients:

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