Health Econ Final Ch1-5

Which of the following best describes productive efficiency? a. Producing a medical service at the lowest possible cost. b. Constructing a new medical facility to exactly offset a market shortage of such services. c. Increasing the amount of hospital beds available such that each person in the population served has a bed allocated to him/her. d. None of the above. e. More than one of the above statements is true.

a) Producing a medical service at the lowest possible cost.

Which of the following might occur after acquiring health insurance due to moral hazard? a. A consumer visits a doctor more frequently. b. A consumer washes his / her hands more frequently. c. A consumer eats healthier. d. All of the above e. None of the above

a. A consumer visits a doctor more frequently

Failure to achieve the maximum total net social benefit (TNSB) results in some amount of _________. a. deadweight loss b. negative TNSB c. increasing opportunity costs d. unnecessary direct costs e. diminishing marginal productivity

a. Deadweight loss

Which of the following is not a characteristics of medical care that distinguishes it from other goods? a. Investment b. Inventory c. Intangibility d. Inconsistency e. Inseparability

a. Investment

A variable payment reimbursement system with low out-of-pocket expenses carries a _____________ of large amounts of medical services. a. High likelihood b. Moderate likelihood c. Low likelihood d. Very low likelihood e. None of the above.

a. Moderate likelihood

_______ are typically the primary source of funding for medical care insurance provided by a government agency. a. Taxes b. Premiums c. Copayments d. Out-of-pocket fees e. None of the above.

a. Taxes

Cost-effectiveness analysis assumes that __________. a. the outcome is desirable b. the marginal benefit is greater than the marginal cost c. resources are unlimited d. there are no indirect costs e. new technology is preferable to old technology

a. The outcome is desirable.

Which of the following is not a basic question that must be answered as a result of scarcity? a. Who should decide the amount of money spent on medical goods and services? b. Who should receive the medical goods and services that are produced? c. What mix of nonmedical and medical goods and services should be produced in the macroeconomy? d. What specific health care resources should be used to produce the chosen medical goods and services? e. What mix of medical goods and services should be produced in the health economy?

a. Who should decide the amount of money spent on medical goods and services?

The _______ refers to the impact a lower price for medical care has on the real purchasing power of consumers. a. income effect b. inflation rate c. effective demand d. substitution effect e. nominal demand

a. income effect

The __________ refers to how much more or less of a product consumers buy when its price changes. a. intensive margin b. extensive margin c. nominal demand d. effective demand e. fuzzy demand

a. intensive margin

Which of the following best describes allocative efficiency? a) Producing a medical service at the lowest possible cost. b) Constructing a new medical facility to exactly offset a market shortage of such services. c) Increasing the amount of hospital beds available such that each person in the population served has a bed allocated to him/her. d) None of the above. e) More than one of the above statements is true.

b) Constructing a new medical facility to exactly offset a market shortage of such services.

Money spent on transportation to a medical care provider is an example of ___________. a. direct medical care costs b. direct nonmedical costs c. indirect costs d. deadweight loss e. None of the above.

b. Direct nominal costs

Germany's health care system can be best described as ______________. a. national health insurance b. socialized health insurance c. managed competition d. public contracting e. pluralistic

b. Socialized health insurance

Any point ____________ the production possibilities frontier is efficient and attainable. a. inside of b. along c. outside of d. both a and b are correct e. both a and c are correct

b. along

Consumer demand for medical care is considered a ________ demand, as it depends on the consumer's demand for good health. a. absolute b. derived c. relative d. supplemental e. supply-side

b. derived

The __________ refers to how many more or fewer people buy a product when its price changes. a. intensive margin b. extensive margin c. nominal demand d. effective demand e. fuzzy demand

b. extensive margin

The ______ states that an individual;s income relative to some social group average impacts health. a. absolute income hypothesis b. relative income hypothesis c. relative position hypothesis d. income inequality hypothesis e. absolute position hypothesis

b. relative income hypothesis

Which of the following best illustrates the law of diminishing marginal utility? a. A physician orders additional exams to provide a more accurate diagnosis. b. A person chooses the most comprehensive health insurance offered every time, regardless of the benefit or cost. c. A patient chooses to visit the dentist twice a year for checkups rather than once a month. d. Congress chooses to continue debating the merits of alternative health policies. e. None of the above.

c. A patient chooses to visit the dentist twice a year for checkups rather than once a month.

______ can help avoid the problem of diminishing marginal productivity of medical care. a. Increases in the number of physicians b. Increases in the number of nurses c. Advancements in medical technology d. both a and b are correct e. All of the above

c. Advancements in medical technology.

__________ has been credited as the leading cause of decreases in child morality during the early twentieth century in the U.S a. The polio vaccine b. Improvements in public education c. Improvements in water quality d. Medicaid e. The improving macroeconomy

c. Improvements in water quality

Which of the following is considered a shortcoming of the human capital approach? a. It includes nonmarket returns b. It is used to estimate the value of a human life c. It includes labor market imperfections d. All of the above e. None of the above

c. It includes labor market imperfections

When will the marginal utility per dollar spent on medical care equal the marginal utility per customer's demand for good health? a. This will only occur when the consumer becomes ill. b. This will only occur when the consumer is healthy. c. This will only occur if the consumer seeks to maximize utility. d. This will only occur if the consumer does not enjoy most forms of entertainment. e. This will never occur.

c. This will only occur if the consumer seeks to maximize utility

The concept of _____ helps explain why some people choose not to visit their primary care physician every day. a. inseparability b. human capital c. diminishing marginal utility d. process quality e. absolute income hypothesis

c. diminishing marginal utility

Not-for-profit firms rely on _______ for initial capital. a. ownership investments b. pre-orders c. donations d. tax exemptions e. non-distribution constraints

c. donations

Lost wages due to a medical disability is an example of __________. a. direct medical care costs b. direct nonmedical costs c. indirect costs d. deadweight loss e. None of the above.

c. indirect costs

Switzerland's health care system can be best described as ___________. a. national health insurance b. socialized health insurance c. managed competition d. public contracting e. pluralistic

c. managed competition

Time costs of acquiring medical care are considered __________. a. direct non-medical costs b. direct medical costs c. opportunity costs d. both a and b e. both a and c

c. opportunity costs

Using the incremental cost-effectiveness ratio, if a new medical technology represents a positive net cost and negative net effect, then ____________. a. the new medical technology dominates the old medical technology b. the relative costs and benefits must be reviewed further c. the old medical technology dominates the new medical technology d. the discount rate utilized should be changed e. a standard gamble should be utilized

c. the old medical technology dominates the new medical technology

Market Failure results form which of the following in the medical care market? a. Lack of fully informed consumers b. Social equity c. Externalities d. All of the above e. None of the above

d. All of the above

Medical care providers in the U.S are reimbursed through the use of ________. a. fixed payment systems b. variable payment systems c. out-of-pocket fees d. All of the above e. both a and c

d. All of the above

Which of the following accounts for the greatest number of deaths in the U.S? a. Chronic lower respiratory diseases b. Alzheimer's disease c. Diabetes mellitus d. Diseases of the heart e. Malignant neoplasms

d. Disease of the heart

Which of the following refers to a situation where the health insurer reimburses 100% of the amount spent on medical services. a. Patient Protection and Affordable Care Act of 2010 b. Managed care c. Coinsurance d. First dollar coverage e. both c and d

d. First dollar Coverage

_________ help explain the law of increasing opportunity cost. a. Differing consumer preferences b. The characteristics of a pure market system c. Advancements in technology d. Imperfect substitutability of resources e. Decreases in the availability of natural resources

d. Imperfect substitutability of resources.

The ______ states that distribution of income directly impacts health. a. absolute income hypothesis b. relative income hypothesis c. relative position hypothesis d. income inequality hypothesis e. absolute position hypothesis

d. Income inequality hypothesis

The U.S market system is best described as a ________. a. Perfect egalitarian system. b. Pure market system. c. Dictatorship. d. Mixed distribution system. e. More than one of the above statements is true.

d. Mixed distribution system.

______ is the largest source of health care funds in the U.S. a. Out-of-pocket b. Medicaid c. Medicare d. Private health insurance e. Workers' compensation

d. Private health insurance

Insurance _______ the price for medical care, thereby ______ the demand for it. a. increases; decreases b. decreases; decreases c. increases; increases d. decreases; increases e. None of the above

d. decreases; increases

Which of the following is not a method used in construction a health-utility index? a. rating scale b. standard gamble c. time trade-off d. discounting e. both b and d

d. discounting

Discounting involves _______ by (1+r)^t to obtain the _________. a. dividing the present value; willingness to pay b. multiplying the future value; present value c. multiplying the present value; willingness to pay d. dividing the future value; present value e. dividing the future value; willingness to pay

d. dividing the future value; present value

The ______ equates the value of a life to the market value of the output produced by an individual during his or her expected lifetime. a. willingness-to-pay approach b. cost-benefit approach c. cost-effectiveness approach d. human capital approach e. cost-utility approach

d. human capital approach

A positive cross-price elasticity estimate between in-patient and out-patient services at a hospital would imply that the two are ____________. a. normal goods b. inferior goods c. compliments d. substitutes e. unrelated

d. substitutes

Which of the following is a limitation of cost-benefit analysis? a. Difficulty choosing the correct discount rate b. Difficulty measuring the value of a human life c. Difficulty measuring the dollar value of gains / losses in utility d. Both a and c are correct e. All of the above

e. All of the above

Which of the following is included in the health production function? a. Age b. State of medical technology c. Gender d. Income e. All of the above

e. All of the above

Which of the following countries provides universal health insurance coverage? a. United States b. Germany c. Switzerland d. United Kingdom e. Canada

e. Canada

The components of the three-legged stool of medical care are _________. a. costs, access, efficiency b. costs, equity, access c. access, equity, efficiency d. efficiency, costs, quality e. costs, access, quality

e. Costs, access, quality.

Which of the following represents an opportunity cost? a. Increases in medical technology. b. Reduction in fees for Medicare patients. c. Additional spending on public health initiatives. d. Increased enrollments at medical schools. e. Forgone geriatric care to provide additional maternity services.

e. Forgone geriatric care to provide additional maternity services.

Which of the following accounts for the greatest amount of health care spending? a. Public health b. Physician services c. Prescription drugs d. Nursing home care e. Hospital services

e. Hospital services

The two major types of public health insurance in the U.S are __________. a. Blue Cross and Blue Shield b. Blue Shield and Medicaid c. Blue Cross and Medicare d. Medicare and Blue Shield e. Medicare and Medicaid

e. Medicare and Medicaid.

________ occurs when more patients are treated by a new medical invention. a. Income inequality b. Treatment substitution c. Social influence d. Environmental impact e. Treatment expansion

e. Treatment expansion

A ________ represents a fixed amount paid by the consumer that is independent of the market price or actual cost of medical care. a. deductible b. loading charge c. coinsurance rate d. claim e. copayment

e. copayment