Health Economics Exam Review
Course Introduction
Health Economics explores the allocation of resources within the healthcare sector, examining how economic principles affect health outcomes, healthcare services, and policy decisions. The course covers topics such as the demand and supply of healthcare, health insurance markets, cost-benefit and cost-effectiveness analysis, and the impact of government intervention and regulation. By applying economic theories and empirical methods, students gain insights into how efficiency, equity, and incentives shape healthcare delivery and financing, both at the national and global levels. This course equips students to critically analyze health policy issues and contributes to informed decision-making in public health and healthcare management.
Recommended Textbook
Health Economics 6th Edition by Rexford E.
Santerre
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16 Chapters
240 Verified Questions
240 Flashcards
Source URL: https://quizplus.com/study-set/3933
Page 2
Chapter 1: Introduction
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15 Verified Questions
15 Flashcards
Source URL: https://quizplus.com/quiz/78432
Sample Questions
Q1) _______ 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
Answer: D
Q2) Among developed countries, the U.S. has the lowest infant mortality rate.
A)True
B)False
Answer: False
Q3) 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
Answer: E
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Chapter 2: Health and Medical Care: an Economic Perspective
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15 Verified Questions
15 Flashcards
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Sample Questions
Q1) 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
Answer: D
Q2) Better macroeconomic conditions have a positive overall impact on health.
A)True
B)False
Answer: False
Q3) 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
Answer: E
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Chapter 3: Cost and Benefit Analysis
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15 Verified Questions
15 Flashcards
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Sample Questions
Q1) Rationality implies that people will always make the correct choice.
A)True
B)False
Answer: False
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) 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.
Answer: B
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Page 5
Chapter 4: Health Care Systems and Institutions
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15 Flashcards
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Sample Questions
Q1) Not-for-profit firms rely on _______ for initial capital.
A) ownership investments
B) pre-orders
C) donations
D) tax exemptions
E) non-distribution constraints
Q2) Market failure results from 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
Q3) 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.
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Page 6
Chapter 5: The Demand for Medical Care
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Sample Questions
Q1) 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
Q2) When will the marginal utility per dollar spent on medical care equal the marginal utility per dollar spent on entertainment for a consumer?
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.
Q3) Demand for most medical services in the U.S. has been found to be inelastic.
A)True
B)False
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Chapter 6: The Demand for Medical Insurance: Traditional and Managed Care Coverage
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15 Verified Questions
15 Flashcards
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Sample Questions
Q1) Reduced coinsurance rates are likely to _______ moral hazard costs and _______ the risk exposure of the consumer.
A) increases; decreases
B) decreases; decreases
C) increases; increases
D) decreases; increases
E) None of the above
Q2) According to John Nyman, classic economic theory overstates the degree of overconsumption of medical services by only considering ______.
A) inefficient moral hazard
B) pure premiums
C) risk-averse consumers
D) efficient moral hazard
E) income effects
Q3) 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
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Chapter 7: Medical Care Production and Costs
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Sample Questions
Q1) If a hospital is experiencing diseconomies of scale, it can reduce the average total cost of production by producing a greater quantity of medical services.
A)True
B)False
Q2) 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
Q3) Which of the following best explains why production might increase at a decreasing rate with the addition of a variable input?
A) Increasing marginal opportunity costs
B) Increasing marginal productivity of labor
C) Diminishing marginal productivity of labor
D) Advancements in technology
E) Diminishing marginal opportunity costs
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Chapter 8: Structure, Conduct, Performance, and Market Analysis
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15 Verified Questions
15 Flashcards
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Sample Questions
Q1) 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.
Q2) Collusion among firms is most likely to take place within which type of industry?
A) Perfect Competition
B) Monopolistic Competition
C) Oligopolies
D) Monopolies
E) None of the above
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Chapter 9: Government, Health, and Medical Care
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15 Verified Questions
15 Flashcards
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Sample Questions
Q1) Government funding of medical schools is an example of a supply-side subsidy.
A)True
B)False
Q2) Suppose a hospital agrees not to charge an insurer a higher price than any other insurer. This would be an example of a _______.
A) exclusive dealing contract
B) most favored nation clause
C) tying contract
D) price ceiling
E) both a and b
Q3) 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
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11
Chapter 10: Government As Health Insurer
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Sample Questions
Q1) 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
Q2) _______ is a prospective payment system used by Medicare to reimburse hospitals for the provision of medical care.
A) Resource-Based Relative Value Scale System
B) Fee-for-service
C) Diagnosis-Related Groups System
D) Doughnut Hole System
E) Capitation Payment System
Q3) At the age of 65, individuals are automatically enrolled in Medicare Part B. A)True
B)False
Q4) The Diagnosis-Related Groups System is a prospective payment system used by Medicare to reimburse physicians for medical care.
A)True
B)False
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Chapter 11: The Private Health Insurance Industry
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15 Verified Questions
15 Flashcards
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Sample Questions
Q1) People obtaining health insurance as part of a group are likely to pay higher premiums than those who acquire coverage individually.
A)True
B)False
Q2) Health insurance mandates may result in market inefficiencies if the marginal cost of additional coverage exceeds the marginal benefit received.
A)True
B)False
Q3) _______ occurs when consumers have less incentive to avoid risky behaviors.
A) Ex post moral hazard
B) Ex ante moral hazard
C) Adverse selection
D) Asymmetric information
E) none of the above
Q4) Scale economies may serve as a barrier to entry in the private health insurance market by mandating a tiered benefit system.
A)True
B)False
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Page 13
Chapter 12: The Physician Services Industry
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15 Verified Questions
15 Flashcards
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Sample Questions
Q1) If all statutes limiting the roles of physician assistants were lifted, the level of competition in the physician services market would decrease.
A)True
B)False
Q2) Traditional fee-for-service payment mechanisms provide incentives to over utilize medical care.
A)True
B)False
Q3) _______ refers to the exploitation of asymmetric information to increase demand for physician services.
A) Physician inflation rate
B) Supplier-induced demand
C) Fee-for-service
D) Market equilibrium
E) none of the above
Q4) Allowing physicians to patent and license practice strategies could help decrease price variations.
A)True B)False
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Chapter 13: The Hospital Services Industry
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15 Flashcards
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Sample Questions
Q1) Third-party payers representing a _______ market share have _______ negotiation power to obtain lower prices for hospital services.
A) small; greater
B) small; reduced
C) large; reduced
D) large; greater
E) both b and d
Q2) Continued hospital consolidations have led to diminished market concentration in most metropolitan market areas.
A)True
B)False
Q3) According to the _______, new technology is most likely to be adopted by research and teaching hospitals first.
A) quantity maximization model
B) quality maximization model
C) managerial expense preference model
D) quality/quantity maximization model
E) utility maximization model
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Chapter 14: The Pharmaceutical Industry
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Sample Questions
Q1) _______ advertising is supported by evidence showing that _______ detailed advertising of older products tends to be targeted at younger physicians.
A) Informative; more
B) Persuasive; less
C) Informative; less
D) Persuasive; more
E) both a and d
Q2) The U.S. government decreases competition within the pharmaceutical industry through the issuing of patents.
A)True
B)False
Q3) The FDA tends to focus more on reducing _______ errors since the victims are _______ identifiable than those from _______ errors.
A) type 1; less; type 2
B) type 2; more; type 1
C) type 2; less; type 1
D) type 1; more; type 2
E) None of the above
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16
Chapter 15: The Long-Term Care Industry
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15 Flashcards
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Sample Questions
Q1) The market demand for long-term care represents a derived demand.
A)True
B)False
Q2) Which of the following best describes a typical nursing home?
A) For-profit ownership with 200 beds
B) Non-profit ownership with 50 beds
C) For-profit ownership with 100 beds
D) For-profit ownership with 50 beds
E) Non-profit ownership with 100 beds
Q3) Which of the following has been shown to discourage competition in the long-term care industry?
A) Certificates of need
B) Sunk costs
C) Scale economies
D) Predominance of Medicaid
E) None of the above
Q4) Barriers to entry in the nursing home industry are relatively low.
A)True
B)False
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Chapter 16: Health Insurance Reform
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Sample Questions
Q1) 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
Q2) An individual mandate system reins in cost through highly competitive medical insurance markets.
A)True
B)False
Q3) Which of the generic health plans would contain costs through highly competitive insurance markets?
A) Managed competition
B) National health insurance
C) Medical savings accounts
D) Individual mandates
E) Both a and d
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Page 18