Question 1

Federal tax policy:

Accepted Answer

A)   treats employer health insurance premiums as taxable income.
B)   subsidizes health insurance and thereby increases the demand for health care.
C)   subsidizes health insurance and thereby decreases the demand for health care.
D)   corrects the overallocation of resources to the health care industry that would otherwise exist.E) A) and D)
F) B) and C)

Question 2

Total U.S.health care spending in 2011 was approximately:

Accepted Answer

A)   $847 billion.
B)   $1.1 trillion.
C)   $2.7 trillion.
D)   $4.1 trillion.E) B) and C)
F) A) and B)

Question 3

In the health care market:

Accepted Answer

A)   demand has increased relative to supply.
B)   supply has increased relative to demand.
C)   neither demand nor supply has changed significantly in the past two decades.
D)   the concepts of demand and supply are irrelevant.E) A) and B)
F) A) and C)

Question 4

The demand for health care in industrially advanced economies is:

Accepted Answer

A)   highly elastic with respect to both price and income.
B)   highly inelastic with respect to both price and income.
C)   highly elastic with respect to income but highly inelastic with respect to price.
D)   about unit elasticity with respect to income and relatively inelastic with respect to price.E) A) and B)
F) A) and C)

Question 5

When the United States is described as having a dual system of health care,this means that:

Accepted Answer

A)   government provides basic health insurance for all Americans and private insurance covers services beyond the basic level.
B)   high-quality care is provided in urban areas,but care in rural areas is of poor quality.
C)   those Americans with good insurance or substantial wealth receive world-class health care,while those without insurance receive no or low-quality health care.
D)   the high-risk segment of the population is required to have health insurance,while the low-risk sector is not.E) A) and D)
F) B) and C)

Question 6

A tax subsidy is involved in employer-financed health insurance because:

Accepted Answer

A)   all working adults are covered by Medicare.
B)   all working adults are covered by Medicaid.
C)   employer payments for health insurance are not subject to income or payroll taxes.
D)   corporations that provide health insurance pay lower corporate income tax rates.E) A) and C)
F) A) and B)

Question 7

The United States devotes about ______ percent of its gross domestic product to health care.

Accepted Answer

A)   5
B)   8
C)   15
D)   18E) A) and D)
F) All of the above

Question 8

Between 1960 and 2011,U.S.health care spending as a percentage of domestic output:

Accepted Answer

A)   more than tripled.
B)   more than quadrupled.
C)   declined by one-half.
D)   remained relatively constant.E) None of the above
F) A) and B)

Question 9

The two main types of managed care organizations are:

Accepted Answer

A)   U.S.veterans' hospitals and university health clinics.
B)   health maintenance organizations (HMOs) and private nursing homes.
C)   health maintenance organizations (HMOs) and preferred provider organizations (PPOs) .
D)   preferred provider organizations (PPOs) and nonprofit hospitals.E) A) and D)
F) B) and D)

Question 10

Health care costs have tended to rise more rapidly in the United States than in Canada because:

Accepted Answer

A)   state insurance regulators in the United States do not face the budget constraints that national regulators in Canada face.
B)   people in the United States want more health care than people in Canada.
C)   private insurance in the United States encourages overconsumption of health care;public insurance in Canada does not.
D)   Canada has better achieved economies of scale in the production of health care.E) A) and B)
F) B) and D)

Question 11

Which of the following factors has contributed to rising health care prices in the United States?

Accepted Answer

A)   The supply of physicians per 100,000 people has decreased since 1975.
B)   Productivity growth in the health care industry has been negative in recent years.
C)   Improvements in medical technology have significantly increased the number of patients that can be treated each year.
D)   The supply of physicians per 100,000 people has risen since 1975,but not as fast as the increase in the demand for physicians' services.E) A) and B)
F) B) and C)

Question 12

Which of the following was not an objection raised by opponents of the Patient Protection and Affordable Care Act?

Accepted Answer

A)   The revenue generated by the new taxes in the PPACA would be insufficient to cover costs of the program.
B)   The PPACA moves the United States closer to creating a national health insurance system with nonprice rationing of health care.
C)   The subsidies would lead to higher prices and increased consumption of health care.
D)   The percentage of health care spending coming directly out of consumers' pockets would increase.E) B) and D)
F) B) and C)

Question 13

Which of the following is a supply factor in the health care market?

Accepted Answer

A)   Defensive medicine.
B)   The aging of the population.
C)   Slow productivity growth in the health care industry.
D)   Asymmetric information.E) A) and C)
F) B) and D)

Question 14

Indiana's health care plan for state employees:

Accepted Answer

A)   has reduced total spending on health care,but at the cost of employees forgoing important preventative care procedures.
B)   has reduced total spending on health care without people forgoing important preventative care procedures.
C)   has increased total spending on health care,but with the benefit of increasing the overall health of state workers who now take greater advantage of preventative care procedures.
D)   has reduced health care spending for those who participate in the plan,but only a small (less than 10 percent) percentage of state employees actually use the system.E) B) and C)
F) C) and D)

Question 15

The number of Americans without health insurance (as of 2011) is approximately:

Accepted Answer

A)   20 million,or about 7 percent of the population.
B)   29 million,or about 10 percent of the population.
C)   49 million,or about 16 percent of the population.
D)   72 million,or about 25 percent of the population.E) None of the above
F) A) and D)

Question 16

According to most experts,which of the following factors is most important in causing health care costs to rise?

Accepted Answer

A)   The aging of the population.
B)   Rising incomes.
C)   Malpractice suits.
D)   Fee-for-service health insurance and cost-increasing technology.E) A) and B)
F) B) and C)

Question 17

(Consider This) Subsidies to encourage hospitals and physicians to adopt electronic medical records have resulted in which of the following?

Accepted Answer

A)   Improved care for a greater number of patients because of the efficiency gains.
B)   Reduced health care costs because of the efficiency gains in record-keeping.
C)   More patients seen but at a higher cost because of the high fixed cost of the recording devices.
D)   Less care at higher costs as the extensive record-keeping process reduces efficiency.E) A) and D)
F) A) and C)

Question 18

Suppose you go to a doctor but your health insurance plan does not reimburse you because you have not yet paid enough out of pocket for the year to qualify for insurance benefits.This is an example of:

Accepted Answer

A)   coinsurance.
B)   a deductible.
C)   monopsony power.
D)   a deferred benefit plan.E) A) and D)
F) B) and D)

Question 19

As a percentage of GDP,U.S.health care spending is:

Accepted Answer

A)   higher than that for Germany and Japan but lower than that of the United Kingdom and Sweden.
B)   higher than for any other major industrial country.
C)   lower than that for Canada.
D)   nearly identical to that of the other major industrial nations.E) A) and C)
F) None of the above

Question 20

The price elasticity of demand for health care is such that an increase in the price of health care will:

Accepted Answer

A)   decrease total health care expenditures.
B)   increase total health care expenditures.
C)   shift the demand for health care rightward.
D)   shift the demand for health care leftward.E) B) and C)
F) A) and B)

Exam 23: Health Care

Between 1960 and 2011,U.S.health care spending as a percentage of domestic output:

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Indiana's health care plan for state employees:

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The United States devotes about ______ percent of its gross domestic product to health care.

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The number of Americans without health insurance (as of 2011) is approximately:

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The price elasticity of demand for health care is such that an increase in the price of health care will:

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Total U.S.health care spending in 2011 was approximately:

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Health care costs have tended to rise more rapidly in the United States than in Canada because:

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When the United States is described as having a dual system of health care,this means that:

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Which of the following was not an objection raised by opponents of the Patient Protection and Affordable Care Act?

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As a percentage of GDP,U.S.health care spending is:

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The two main types of managed care organizations are:

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Federal tax policy:

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The demand for health care in industrially advanced economies is:

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A tax subsidy is involved in employer-financed health insurance because:

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Suppose you go to a doctor but your health insurance plan does not reimburse you because you have not yet paid enough out of pocket for the year to qualify for insurance benefits.This is an example of:

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(Consider This) Subsidies to encourage hospitals and physicians to adopt electronic medical records have resulted in which of the following?

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According to most experts,which of the following factors is most important in causing health care costs to rise?

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Which of the following factors has contributed to rising health care prices in the United States?

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In the health care market:

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Which of the following is a supply factor in the health care market?

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