Economics of Healthcare Systems
Textbook Exam Questions
Course Introduction
Economics of Healthcare Systems explores the intricate financial and organizational structures that underpin healthcare delivery worldwide. This course examines how various healthcare systems allocate resources, fund services, and respond to market dynamics, emphasizing the balance between cost, quality, and access. Students analyze models such as single-payer, multi-payer, and mixed systems, as well as the roles of government regulation, insurance mechanisms, and private sector involvement. Through comparative and case-study approaches, learners gain an understanding of healthcare efficiency, equity, and sustainability, alongside current challenges and policy reforms shaping health economics on a global scale.
Recommended Textbook Health Economics 6th Edition by Rexford
E. Santerre
Available Study Resources on Quizplus
16 Chapters
240 Verified Questions
240 Flashcards
Source URL: https://quizplus.com/study-set/3933 Page 2
Chapter 1: Introduction
Available Study Resources on Quizplus for this Chatper
15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/78432
Sample Questions
Q1) Opportunity costs only occur when there is government involvement in markets such as health care.
A)True
B)False
Answer: False
Q2) 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.
Answer: D
Q3) All points along the production possibilities frontier maximize equity.
A)True
B)False
Answer: False
Q4) Physicians are a scarce resource in health care markets.
A)True
B)False
Answer: True
Page 3
To view all questions and flashcards with answers, click on the resource link above.
Chapter 2: Health and Medical Care: an Economic Perspective
Available Study Resources on Quizplus for this Chatper
15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/78431
Sample Questions
Q1) The reduction in the number of reported polio cases was due largely to government health programs.
A)True
B)False
Answer: False
Q2) Advancements in medical technology allow people to obtain greater amounts of health with the same amount of medical care.
A)True
B)False
Answer: True
Q3) _______ 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
Answer: C
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Cost and Benefit Analysis
Available Study Resources on Quizplus for this Chatper
15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/78430
Sample Questions
Q1) 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
Answer: C
Q2) The use of a larger discount rate will result in a lower present value when estimating the costs and benefits of new medical technology.
A)True
B)False
Answer: True
Q3) Rationality implies that people will always make the correct choice.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Health Care Systems and Institutions
Available Study Resources on Quizplus for this Chatper
15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/78429
Sample Questions
Q1) Increased consumer copayment requirements may help to reduce health care expenditures.
A)True
B)False
Q2) 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
Q3) 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
Q4) The majority of U.S. hospitals operate as non-profit organizations.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: The Demand for Medical Care
Available Study Resources on Quizplus for this Chatper
15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/78428
Sample Questions
Q1) Larger deductible requirements decrease the risk of moral hazard.
A)True
B)False
Q2) 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
Q3) A negative income elasticity of demand for out-patient services would imply that it is an inferior good.
A)True
B)False
Q4) 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
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: The Demand for Medical Insurance: Traditional and Managed Care Coverage
Available Study Resources on Quizplus for this Chatper
15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/78427
Sample Questions
Q1) A risk-averse individual will always prefer a certain amount of income over an expected amount of income of equal value.
A)True
B)False
Q2) Elimination of the tax-exempt status of employer-sponsored health insurance would most likely lead to a decrease in the purchase of health insurance.
A)True
B)False
Q3) Consumer-driven healthcare attempts to _______ moral hazard costs by _______ out-of-pocket expenditures faced by consumers.
A) increase; decreasing B) decrease; decreasing C) increase; increasing D) decrease; increasing E) None of the above
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Medical Care Production and Costs
Available Study Resources on Quizplus for this Chatper
15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/78426
Sample Questions
Q1) If the average product of dental assistants is _______, then the marginal product of that labor must be _______ its average product.
A) increasing; less than B) decreasing; equal to C) decreasing; less than D) increasing; equal to E) decreasing; greater than
Q2) In the short run, if the marginal cost of production is equal to the average total cost of production, then the average total cost is _______.
A) less than the average variable cost
B) less than the average fixed cost
C) maximized
D) minimized E) equal to the average variable cost
Q3) If a hospital is cost-minimizing, then the marginal productivity per dollar spent on physicians must be equal to the marginal productivity per dollar spent on nurses. A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Structure, Conduct, Performance, and Market Analysis
Available Study Resources on Quizplus for this Chatper
15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/78425
Sample Questions
Q1) In the long-run, economic profits will be zero in monopolistic competition.
A)True
B)False
Q2) If there is an increase in the number of registered nurses and the demand for medical services remains unchanged, what should be expected to happen to the real hourly wage for registered nurses?
A) The real hourly wage should increase.
B) The real hourly wage should only increase if the demand for medical services is inelastic.
C) The real hourly wage should only decrease if the demand for medical services is elastic.
D) The real hourly wage should decrease.
E) The real hourly wage should only increase if the demand for medical services is elastic.
Q3) If the market price is greater than the marginal cost, a profit-maximizing firm will choose to produce less.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Government, Health, and Medical Care
Available Study Resources on Quizplus for this Chatper
15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/78424
Sample Questions
Q1) The U.S. federal income tax is _______, and therefore provides incentives for higher income individuals to purchase _______ amounts of employer-sponsored health insurance.
A) progressive; smaller
B) regressive; larger
C) regressive; smaller
D) progressive; larger
E) None of the above
Q2) Suppose a government decides to subsidize flu vaccinations in an attempt to correct a market failure. Without this government intervention, the flu vaccination would most likely be ______ due to the presence of _______.
A) over-consumed; negative externalities
B) under-consumed; positive externalities
C) over-consumed; positive externalities
D) under-consumed; negative externalities
E) none of the above
Q3) Medical care is a public good, as it is both non-rival and non-excludable.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Government As Health Insurer
Available Study Resources on Quizplus for this Chatper
15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/78423
Sample Questions
Q1) "Crowding out" due to an expansion of Medicaid requirements is best described by which of the following?
A) A family chooses to remain covered under employer-sponsored private health insurance.
B) An uninsured family chooses to enroll in Medicaid due to a low household income.
C) A family newly eligible withdraws from an employer-sponsored private health insurance and enrolls in Medicaid.
D) both b and c
E) none of the above
Q2) Increasing access to medical care for low income individuals and households through the expansion of Medicaid eligibility requirements could decrease the quality of medical care received by current Medicaid beneficiaries.
A)True B)False
Q3) At the age of 65, individuals are automatically enrolled in Medicare Part B.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: The Private Health Insurance Industry
Available Study Resources on Quizplus for this Chatper
15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/78422
Sample Questions
Q1) _______ occurs when high-risk individuals subscribe to an insured group of low-risk individuals.
A) Moral Hazard
B) Asymmetric Information
C) Rationality
D) Scale Economies
E) Adverse Selection
Q2) _______ occurs when insurance companies structure plans that provide an incentive for healthier consumers to enroll while discouraging enrollment of higher-risk individuals.
A) Moral Hazard
B) Asymmetric Information
C) Cherry-picking
D) Guaranteed renewability
E) Adverse Selection
Q3) An increased HMO presence in insurance markets will likely increase premiums for consumers.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: The Physician Services Industry
Available Study Resources on Quizplus for this Chatper
15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/78421
Sample Questions
Q1) The _______ suggests that per capita variations in the use of medical care are due to variations in clinical opinions regarding the appropriate amount and type of medical care.
A) physician practice hypothesis
B) supplier-induced demand hypothesis
C) enthusiasm hypothesis
D) principal-agent hypothesis
E) small area variation hypothesis
Q2) There is very little recent support for the existence of supplier-induced demand.
A)True
B)False
Q3) What are the two primary goals of the malpractice system?
A) Reduce the number of claims and deter negligence
B) Compensate victims and deter negligence
C) Reduce the number of claims and limit the size of awards
D) Increase the number of claims and compensate victims
E) none of the above
To view all questions and flashcards with answers, click on the resource link above.
14
Chapter 13: The Hospital Services Industry
Available Study Resources on Quizplus for this Chatper
15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/78420
Sample Questions
Q1) Assume that there are 5 equally sized hospitals in a market area. If two of these hospitals decide to merge, what will be the increase in the Herfindahl-Hirschman index?
A) 2000
B) 800
C) 1600
D) 2800
E) 400
Q2) Which of the following accounts for the largest portion of hospital expenditures?
A) Private insurance
B) Out-of-pocket
C) Government
D) Charity care
E) Other
Q3) An increased HMO presence in insurance markets will likely increase premiums for consumers.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: The Pharmaceutical Industry
Available Study Resources on Quizplus for this Chatper
15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/78419
Sample Questions
Q1) Patents award pharmaceutical firms the sole right to produce a product for _______ years and _______ the financial incentive for firms to develop new drugs.
A) 25; increase
B) 18; decrease
C) 20; increase
D) 15; increase
E) 25; decrease
Q2) Which of the following serves as a barrier to entry in the pharmaceutical industry?
A) Government patents
B) Certificates of need
C) Brand-loyalty advantage
D) Both a and c
E) All of the above
Q3) The U.S. government decreases competition within the pharmaceutical industry through the issuing of patents.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 15: The Long-Term Care Industry
Available Study Resources on Quizplus for this Chatper
15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/78418
Sample Questions
Q1) Retrospective payment systems _______ costs, _______ quality, and result in _______ severe patient case-mixes.
A) raise; diminish; more
B) raise; improve; less
C) decrease; improve; more
D) raise; improve; more
E) decrease; diminish; less
Q2) Evidence suggests that nursing homes can substantially reduce their average total cost of production by increasing the amount of patients served due to substantial economies of scale.
A)True
B)False
Q3) Which of the following is a provider of long-term care?
A) For-profit hospitals
B) Assisted living facilities
C) Senior centers
D) Non-profit hospitals
E) Both b and c
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Health Insurance Reform
Available Study Resources on Quizplus for this Chatper
15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/78417
Sample Questions
Q1) Evidence suggests that medical care spending produces positive net benefits _______, but produces negligible net benefits _______.
A) on average; at the margin
B) at the margin; on the flat-of-the-curve
C) on the flat-of-the-curve; on average
D) at the margin; on average
E) on the flat-of-the-curve; at the margin
Q2) _______ has the highest infant mortality rate amongst developed countries.
A) Canada
B) The United States
C) France
D) Germany
E) Sweden
Q3) Which of the generic health plans would best eliminate the problem of moral hazard?
A) Managed competition
B) National health insurance
C) Medical savings accounts
D) Individual mandates
E) Both a and c
To view all questions and flashcards with answers, click on the resource link above. Page 18