health economics com test ( chap 3 and 4)

smaller companies/ employers with less than____ employees will not face the same financial fines for refusing to buy insurance but they will be encouraged by the federal government to provide insurance for all their employees. the government will be setting up special marketplaces to make it easier for small employers to take the plunge in providing health insurance coverage for all their employees.

50

Which definition best describes an externality

A cost or benefit that spills over to parties not directly involved in the actual transaction and is thus ignored by the buyer and seller

A natural monopoly is best described by which of the following

A firm becomes a natural monopoly based on its ability to provide a good service at a lower cost than anyone else and satisfy consumer demand completely

A non excludable good or service is which of the following?

A good or service that is difficult to limit to specific group of consumers . In other words, if the item is available to anyone, it becomes available to everyone.

An non rival good can be describe as

A good or service which does not ,when consumed by one individual, limit the amount available to anyone else

How is a merit good defined

A good whose benefits are not fully appreciated by the average consumer and thus should be provided collectively.

Universal coverage is

A guarante that all citizens will have health insurance coverage regardless of income or health status. Coverage usually requires mandatory participation.

Universal access

A guarantee that all citizens who desire health insurance will have access to health insurance regardless of income or health status. Participation is voluntary.

What is formulary

A list of approved pharmaceutical drugs that will be covered under a health plan. Other drugs are typically unavailable to members of the plan.

What is meant by or how is "Time Preference" used?

A term that refers to the extent to which people discount the future

Health maintenance organization (HMO) refers to what ?

A type of managed care organization that functions like an insurer and arranges for the provision of care to its members.

A person with AIDs applies for health insurance but hides his health from the insurance company. What is the likely result for the insurance company

Adverse selection

Who can be described as a free rider

An individual who does not buy insurance, knowing that in the event of serious illness, medical care will be provided free of charge.

What is the purpose of cost containment strategies

Are used to control the total spending on health care services.

The uncertainty and unbalanced of information between a doctor and patient is best described by which

Asymmetry of information

Retrospective payment is

Determined after delivery of the goods or service. Traditional fee for service medicine determines payment ex post or after the fact.

even with____ insurance coverage and the expansion in _______ insurance coverage, a lot of Americans will still be left without insurance. or those not covered, or for those who find their work coverage too expensive ,a new way to buy insurance on our own will be popping up everywhere. they are called health insurance Marketplaces

Employer and medicaid

The U.S spends significantly less on health care than any other developed country in the world

False

The marginal efficiency of capital (MEG) is a measure of how much extra output can be produced with an extra ten (10) units of input

False

This relationship between doctor and patient is often presented as an agent- principal problem. The doctor is the principal acting on behalf of the agent, who is the patient, in making decisions about what health care to purchase. If doctors made these decisions in a manner fully consistent with patients preferences, unaffected by the consequences for themselves, they would be acting as perfect principal

False

Imperfections in Medical Markets include which of the following ?

Imperfect information price transparency barriers to entry third- party payers

which of following is / are example(s) of positive externality

Imroved health from more people being vaccinated ( herd immunity) the use of hybrid ( green) cars

Which of the definition describes a Nonrivalry ?

Is a good which when more than one person can enjoy the benefits of consumption without affecting the enjoyment of the other.

Which description, according to the assigned readings, best explains the "indifference curve "

Shows the various combination of health and consumption goods that provide an individual with an equal amount of satisfaction or utility. A higher indifference cure represents a higher level of total utility.

Fee for service is

The traditional payment method for medical care in which a provider (doctor) bills a patient directly for each service provided

diminishing marginal utility is best explained when which of the following conditions or outcomes are achieved

additional units consumed are assumed to yield smaller marginal imorovements in utility

which of the following results from the paptients having better inforamtion about theor health ststaus than insurers?

adverse selection

factors that affect the investment in health include which of the following

age education lifestyle income

accodring to the chapter 3 readings, the term " not -for- profit" is best described by which of the following

an organizational form where the distribution of a surplus ( revenge- cost) must be invested back into the operation. These tazx- exempt firms are organized to promote their own interest.

under which of following circumstances is the principal- agent problem likely to be most serious

between surgeons and patients

which of the following is not a result of moral hazard

deductibles and coininsurance increase medical care spending increased liklihood of visiting a physician higher health insurance premiums

in general insurance coverage can only be purchased during special

enrollment

which explanation best describes human capital

equates the value of a human life to the discunted market value of the output produced by an individual over an expected period.

which of the behaviors/ activities that related to resource allocation contribute to markets failure ?

firms have market power there externalities in consumption and production when the good produced is a public good

unlike now, insurer companies cannot ____the cost of insurance prices if some employee are sick.

increases

a superior good is a

is a good which you buy more of as your income increases

the concept quality- adjusted life year (QALY)

is used extensively to evaluate medical care resource allocation within government- run programs on fixed budgets, especially in europe.

if a hospital is experiencing economics of scale

its average cost curve is negatively sloped as output increase

which description, according to the assigned readings, best explains the "indifference Curve"

shows the various combinations of health and consumption goods that provide an individual with an equal amount of satisfaction or utility. A higher indifference curve represents a higher level of total utility.

some small companies will be offered temporary _____ breaks if they provide health insurance to all their employees.

tax

the optimal level of output may be defined as that level of output where

the marginal benefit of the last unit purchased equals its marginal way

an externality may be either positive or negative,depending on whether it benefits or harms

true

anything that increazse the demand for health should increase the demand for health care, other things being equal. for instance, higher wages, which make health days more valuable, should increase the demand for health and health care.

true

market failure arises when the free markets fails to promote the efficient use of a resource by either producing more or less than the optimal level of output. sources of market failure include natural monopoly,externalities in production and consumption,and public goods. other market imperfections such as incomplete information and immobile resources also contribute to this problem

true

in what way(S) can the medical care system be viewed or assessed differentlty when compared to others good and service

unpredictability asymmetric information barriers to entry papyment pratices

which of the following are supportive arguments put forward by those who believe that the government should be involved in the business of medical care

-medicare is too complicated to be left to market forces -medical care is a social good, too important for the impersonal marketplace -medicine difficult to understand; patient must rely on doctors.

according to the chapter 3 readins ___ % of the unisured are ages ____

38%, ages 19 - 34

Market failure in medical markets is caused by which of the following

Monopolies Externalities Medical care being a public good

What measures would likely lower infant mortality rates in the United States

Prenatal care programs in low income neighborhoods Reduce drug use among expected mothers Better nutrition Delaying childbearing beyond the teen- age years

Which of the following results from providers having more information about treatment alternatives than their patients?

Principle-agent problem

A characteristic of health care markets is uncertainty about diagnoses, available treatments, and effectiveness of those treatments. This leads to uncertainty and unbalance of information. Much off the uncertainty is one- sided : the consumer lacks the medical training and knowledge to make informed choices.

True

A situation in which information is unequally distributed between the individuals in a transaction. The person with more information will be information will have an unfair advantage in determining the terms of any agreement. For example, a doctor and patient relationship in which the doctor has far more information than the patient.

True

An externality may be either positive or negative, depending on whether it benefits or harms other people

True

Anything that contributes to producing better health such as nutritious food, clean air, and exercise, can be considered health care. Is this a true or false statement?

True

Health itself can be thought of as a good, albeit one with special characteristics. It can be regarded as fundamental commodity which all humans want regardless of their financial or social status

True

Medical outcomes in U.S are relatively poor, compared with other Countries

True

We measure the responsiveness of consumers to changes in the price of a good or service by the price elasticity of demand

True

which of the folloiwng are supportive agruments put forward by those who believe that the government should not be involved in the business of medical care

U.S systems has remained mostly market based

which of the following developed country/ economy has the worst infant mortaility rates

United States

self interest can be explained by which of the following

a behavioral characterisitic of indivduals acting to promote their own satisfaction/ utility

a normal good is a

a good for which income elasticity is positive but less than one. this means that if income increases by given percentage then associated with the income increase.

marginal efficiency of capital is best explained by which of the following defintions

a measure of how much extra output can be produced with an extra of unit of input