Increased spending on household appliances or education in a particular economy can be regarded as economically desirable because production is
expanding under relatively competitive market conditions with allocative efficiency.
contracting under relative
expanding under relatively competitive market conditions with allocative efficiency.
There is much concern about rising health care expenditures as a percentage of the GDP because
not all income groups have access to health care.
these expenditures do not produce capital goods.
of the unique factors that characterize the market for health
of the unique factors that characterize the market for health care services.
The "twin problems" of the health care industry are
rising prices for all and deteriorating rates of health.
rising prices for all and limited access.
deteriorating rates of health and limited access.
limited access and too few doctors.
rising prices for all and limited access.
Medicare
is covered through income taxes.
consists of a hospital insurance program and certain other coverage for post-hospital care.
includes an unsubsidized medical insurance portion.
covers over three-fourths of those in poverty.
consists of a hospital insurance program and certain other coverage for post-hospital care.
Rising health care costs
add to government revenue, especially as the proportion of the population paying for benefits increases.
lower government revenue, especially as the proportion of the population paying for benefits decreases.
stretch government bu
stretch government budgets, especially as the proportion of the population qualifying for benefits increases.
Rapidly rising health care costs will
encourage in shoring
increase off shoring
eliminate off shoring
decrease off shoring
increase off shoring
The special characteristics of the U.S. health care market include
ethical issues, an over-supply of doctors, external benefits, and third-party payments.
ethical issues, inadequate information about needed services, external benefits, and third-party pay
ethical issues, inadequate information about needed services, external benefits, and third-party payments.
Consider the characteristics of the U.S. health care market. Which of the following statements is true?
Society regards access to basic health care as a service.
Consumers directly pay lower "out-of-pocket" expenses which causes them to overconsume.
Exter
Consumers directly pay lower "out-of-pocket" expenses which causes them to overconsume.
Income elasticity of demand for health care is
0.2, and the price elasticity is 1.0.
1.0, and the price elasticity is 0.2.
-1.0, and the price elasticity is 0.2.
-0.2, and the price elasticity is 1.0.
0.2, and the price elasticity is 1.0.
The income elasticity of demand for health care suggests that
health care spending will rise proportionately with income, while the price elasticity of demand suggests that higher prices for health care services will increase total health care spending.
h
health care spending will rise proportionately with income, while the price elasticity of demand suggests that higher prices for health care services will increase total health care spending.
The health care market has unusual demand and supply conditions because
consumers have the power to create demand for what they produce.
consumers have the power to create the supply for what they produce.
producers have the power to create demand for wha
producers have the power to create demand for what they produce.
Asymmetric information refers to the fact that
producers of health care must depend on insurance companies to decide about the health care services they can provide.
consumers of health care must depend on health care professionals to order the services f
consumers of health care must depend on health care professionals to order the services for them because consumers of health care often have very little understanding of, or access to, the information about the health care services that they need.
Fee-for-service payments can contribute to rising health care costs by making it
possible for providers to increase their patient load by simply offering more services for the patient.
impossible for providers to increase their incomes by simply ordering
possible for providers to increase their incomes by simply ordering more services for the patient.
Defensive medicine refers to the practice that
physicians follow to avoid taking new patients.
patients follow to avoid health care charges.
patients follow to avoid sub-standard health care.
physicians follow to avoid malpractice charges.
physicians follow to avoid malpractice charges.
Medical ethics can raise health care costs by
requiring "best practice" techniques.
identifying high cost procedures and reducing their use.
creating a standard review of all recommendations.
not extending life long enough.
requiring "best practice" techniques.
Advances in medical technology and health insurance interact to drive up the costs of medical care because they
discourage the use of services without regard to cost and increase demand for technological services.
encourage the use of services without reg
encourage the use of services without regard to cost and increase demand for technological services.
The moral hazard problem is relevant to the health care market because an insured individual may
be too vigilant about preventive health care but underconsume services.
neglect preventive health care, and may also overconsume services.
neglect preventive
neglect preventive health care, and may also overconsume services.
The rationale for exempting a firm's contribution to its workers' health insurance from taxation as worker income is that
spillover costs occur with a healthy, productive workforce.
internal benefits exist from a healthy, productive workforce.
internal co
spillover benefits exist from a healthy, productive workforce.
Preferred provider organizations
are owned by hospital holding companies.
contract for health care services.
deliver medical services through collective agreements regarding pricing.
deliver medical services through exclusive agreements regarding pricing.
deliver medical services through collective agreements regarding pricing.
Health maintenance organizations
contract for health care services.
are owned by hospital holding companies.
deliver medical services through exclusive agreements regarding pricing.
deliver medical services through collective agreements regarding pricing.
contract for health care services.
Health savings accounts can reduce the overconsumption of health care because
the funds of the account belong to the worker.
they are part of a benefit package.
medical services are contracted with a certain provider.
the funds of the account belong to th
the funds of the account belong to the worker.
The Patient Protection and Affordable Care Act's attempt to extend insurance coverage to all Americans is costly because it
prevents insurance companies from denying coverage to anyone on the basis of a preexisting medical condition.
sets reimbursement ra
prevents insurance companies from denying coverage to anyone on the basis of a preexisting medical condition.
The Patient Protection and Affordable Care Act (PPACA) attempts to obtain the funds needed to extend insurance coverage to all Americans through
a personal mandate to buy insurance, an employer mandate to provide insurance, and an assortment of new taxes.
a personal mandate to buy insurance, an employer mandate to provide insurance, and an assortment of new taxes.
The Patient Protection and Affordable Care Act (PPACA) attempts to ensure affordable insurance for the poor by
inducing larger companies to require all employees to pay for health insurance.
expanding the Medicaid system to cover all Americans.
assigning
preventing insurance companies from denying coverage to anyone on the basis of a preexisting medical condition.
Objections to the Patient Protection and Affordable Care Act (PPACA) include concerns regarding
the likelihood for no change in the growth rate of health care expenditures.
a national health insurance system in which price rationing might become necessary
Federal control over the pricing and content of insurance policies.
The three major cost-reducing features of the Singapore health care system include
competition related to posting prices, low out-of-pocket costs, and a required health savings account.
competition related to posting prices, high out-of-pocket costs, and
competition related to posting prices, high out-of-pocket costs, and a required health savings account.
From an economic point of view, what factor likely has the largest effect on holding down the price of medical care in Singapore?
No requirement to join
Low out-of-pocket costs
The triage approach to allocating health care
High out-of-pocket costs
High out-of-pocket costs
How difficult do you think it would be to implement the information aspect of the Singapore system and the forced savings accounts in the United States?
These aspects would be
well accepted in the U.S. because of the desire for national health care.
diffi
difficult to implement in the U.S. because of the belief in limited government.
All MegaCorp employees who stay on the job for more than three years are rewarded with a 10 percent pay increase and coverage under a private health insurance plan that MegaCorp pays for. Tina just passed three years as a MegaCorp employee and reacts to h
the moral hazard problem
By increasing demand, health insurance creates:
a deadweight loss related to overconsumption
a deadweight loss related to underconsumption
neither of the above
a deadweight loss related to overconsumption