Health Economics and Policy 8th Edition Solution Manual by Henderson | Complete Textbook Answers

Health Economics and Policy, 8th Edition Solution Manual by Ja
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mes W. Henderson.
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1 Opportunityjcostjisjajmeasurejof
a. foregonejopportunities.
b. valuejbasedjonjthejalternativejnotjchosen.
c. valuejinjtermsjofjthejcostjofjproduction.
d. thejdifferencejbetweenjproductionjcostjandjresourcejcost.
e. bothjajandjb.

2. Thejopportunityjcostjofjinvestingjinjajnewjlithotripterj(ajmachinejthatjpulverizesjkidneyjstonesjwi
thjsoundjwaves)jis
a. definedjbyjthejdollarjcostjofjthejequipment.
b. thejsamejforjeveryjhealthjcarejprovider.
c. measuredjbyjthejdifferencejbetweenjthejexpectedjrevenuesjfromjsellingjthejservicesjofj
thejlithotripterjandjthejinvoicejcostjofjthejmachine.
d. definedjbyjthejnextjbestjusejofjthejmoneyjinvestedjinjthejequipment.
e. impossiblejtojcalculate.

3. Thej“invisiblejhand”jusingjAdamjSmith’sjterminologyjrefersjto
a. governmentjcontroljofjthejmarket.
b. marketjforcesjworkingjthroughjthejpricejmechanism.
c. thejmoneyjsupplyjthatjservesjtojkeepjthejeconomyjworkingjsmoothly.
d. thejrolejofjinnovationjinjmaintainingjajsteadyjratejofjgrowth.
e. “behind-the-
scenes”j policyj makingj toj influencej howj marketsj allocatej scarcejresources.

4. Accordingjtojrecentjpublicjopinionjpolls,jwhatjpercentagejofjAmericansjarejsatisfiedjwithjthejqu
alityjofjthejmedicaljcarejtheyjreceive?
a. 15jpercent.
b. 40jpercent.
c. 65jpercent.
d. 70jpercent.
e. 90jpercent.




©j2015jCengagejLearning.jAlljRightsjReserved.jMayjnotjbejcopied,jscanned,jorjduplicated,jinjwholejor
injpart,jexceptjforjusejasjpermittedjinjajlicensejdistributedjwithjajcertainjproductjorjservicejorjotherwisejonj
ajpassword-protectedjwebsitejforjclassroomjuse.

,5. Chargingjhigherjpricesjforjonejcategoryjofjpatientsjinjorderjtojprovidejfreejorjsubsidizedjcarejtoj
anotherjgroupjisjcalled
a. pricejdiscrimination.
b. cost-shifting.
c. categoricaljcosting.
d. reprehensiblejandjunethical.
e. creativejaccounting.

6. AccordingjtojeconomicjtheoryjwhatjisjthejoptimaljpercentagejofjGDPjtojbejspentjonjmedicaljcar
e?
a. 6jpercent.
b. 8jpercent.
c. 10jpercent.
d. 12jpercent.
e. Therejisjnojwidely-acceptedjwayjtojdeterminejthejoptimaljpercentage.

7. WhatjphrasejbestjdescribesjmedicaljcarejspendingjinjthejUnitedjStatesjinj1998?
a. Totaljspendingjofjmorejthanj$2jtrillionjrepresentsj17jpercentjofjGDPjandjapproximately
$8,000jperjcapita.
b. Totaljspendingjofjmorejthanj$1jtrillionjrepresentsj14.8jpercentjofjGDPjandjalmostj$6,000jpe
rjcapita.
c. Totaljspendingjofjlessjthanj$1jtrillionjrepresentsjlessjthanj13jpercentjofjGDPjandjalmost
$3,000jperjcapita.
d. Totaljspendingjisjrisingjatjdouble-
digitjratesjandjspendingjisjsoaringjtojoverj$5,000jperjcapita.
e. TotaljspendingjisjunderjcontroljandjrepresentsjajshrinkingjpercentagejofjGDP.

8. Thej1974jfederaljlegislationjthatjexemptedjemployersjfromjcertainjstatejlawsjgoverningjhealthjin
surancejwas
a. COBRA
b. ERISA
c. CON
d. HIPAA
e. SCHIP

9. Whichjofjthejfollowingjstatementsjisjbasedjonjpositivejanalysis?
a. Individualsj withoutj healthj insurancej havej lessj accessj toj physicians’j servicesj thanjth
osejwhojhavejhealthjinsurance.
b. ThejhighjcostjofjhealthjinsurancejplacesjU.S.jfirmsjatjajcompetitivejdisadvantagejwithjth
eirjforeignjcompetitors.
c. Employersjshouldjbejrequiredjtojprovidejhealthjinsurancejforjalljfull-
timejworkersjandjtheirjdependents.
d. nonejofjthejabove.

©j2015jCengagejLearning.jAlljRightsjReserved.jMayjnotjbejcopied,jscanned,jorjduplicated,jinjwholejor
injpart,jexceptjforjusejasjpermittedjinjajlicensejdistributedjwithjajcertainjproductjorjservicejorjotherwisejonj
ajpassword-protectedjwebsitejforjclassroomjuse.

, e. Bothjajandjb.

10. Economistsjusejthejtermj“marginal”jtojdescribejcostsjandjbenefits
a. thatjarejminimaljandjhardlyjworthjnoting.
b. thatjarejincrementaljandjthusjrelevantjtojdecisionjmaking.
c. thatjarejnoteworthyjbutjnotjthejmostjimportant.
d. whosejimportancejcanjbejminimizedjthroughjhardjwork.
e. nonejofjthejabove.

11. Selfjinsurancejrefersjto:jthejpracticejofjsettingjasidejfundsjtojpayjforjmedicaljcarejexpensesjins
teadjofjpayingjpremiumsjtojanjinsurancejcompany.j Approximately,j
ofjalljemployeesjwhojparticipatejinjgroupjinsurancejplansjworkjforjfirmsjthatjself-insure.
a. startingjone’sjownjinsurancejcompany
b. buyingjinsurancejfromjajnotjforjprofitjentity
c. settingjasidejfundjtojpayjforjmedicaljcarejexpensesjinsteadjofjbuyingjinsurance
d. nonejofjthese
e. bothjajandjb

12. Whichjofjthejfollowingjisjnotjajcharacteristicjthatjmakesjmedicaljcarejdifferentjfromjotherjcom
modities?
a. Demandjforjmedicaljcarejisjirregular.
b. Sellersjhavejmorejinformationjthanjbuyers.
c. Third-partyjpayersjabound.
d. For-profitjprovidersjplayjajmajorjrolejinjdeliveringjmedicaljcare.
e. Thejtransactionjitselfjifjfilledjwithjuncertainty.


StructuredjDiscussion:

1. Resolved:jThejUnitedjStatesjsystemjofjhealthjcarejdeliveryjisjinjajstatejofjcrisis.

2. Resolved:j Thej recentj slowingj ofj healthj carej spendingj asj aj sharej ofj grossj domestic

productjwilljcontinue.j Injotherjwords,jthejrelativejsizejofjthejhealthjcarejsectorjhasjreac
hedjajnaturaljlimit.

Appendixj1A:jThejMedicaljCarejPricejIndex

Thisjappendixjdemonstratesjthejusejofjpricejindexesjtojmeasurejpricejchanges.j Cautionjisjadvisedj

injinterpretingjchangesjinjfixed-

weightjindexes,jsuchjasjthejConsumerjPricejIndexj(CPI)jandjthejMedicaljCarejPricejIndexj(MCPI),jasj
ajmeasurejofjinflation.j ProblemsjinjusingjthejMCPI

©j2015jCengagejLearning.jAlljRightsjReserved.jMayjnotjbejcopied,jscanned,jorjduplicated,jinjwholejor
injpart,jexceptjforjusejasjpermittedjinjajlicensejdistributedjwithjajcertainjproductjorjservicejorjotherwisejonj
ajpassword-protectedjwebsitejforjclassroomjuse.

, tojmeasurejmedicaljinflationjarejdiscussed,jincludingjwhatjtojmeasure,jhowjtojaccountjforjqualityjim

provements,jandjhowjtojincorporatejnewjproductsjintojthejindex.

AppendixjObjectives

1. Summarizejthejissuesjinvolvedjinjmeasuringjpricejchangesjwithjpricejindexes.

2. Describejthejusejofjthejmedicaljcarejpricejindexjinjmeasuringjchangesjinjmedicaljcarejpri

ces.

3. Specifyjalternativesjforjmeasuringjpricejchanges.
AppendixjOutline

a. Measuringjpricejchangesjwithjindexjnumbers
b. Medicaljcarejpricejindex
c. Problemsjwithjusingjajfixed-weightjindexjasjajmeasurejofjinflation
d. Measuringjinputsjinsteadjofjoutcomes
e. Measuringjqualityjchanges
f. Accountingjforjnewjproducts
g. Otherjproblems
h. Alternativejmethodsjtojmeasurejmedicaljcarejinflation
i. Summaryjandjconclusions




Chapter 2: Using Economics to Study Health Care Issues
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Thisjchapterjintroducesjthejbasicjeconomicsjmodeljofjsupplyjandjdemandjandjexaminesjitsjusejinjt

hejstudyjofjhealthjcarejissues.j Ajdiscussionjofjthejprinciplesjofjoptimizingjbehaviorjsetsjthejstagejf

orjthejdevelopmentjofjthejmodeljofjdemandjandjsupply.j Ajdiscussionjofjthejtheoryjofjthejfirmjfollo

ws,jcontrastingjperfectjandjimperfectjcompetition.j Supply-jandjdemand-

sidejimperfectionsjarejalsojdiscussed.


ChapterjOutline

a. Thejrelevancejofjeconomicsjinjhealthjcare
©j2015jCengagejLearning.jAlljRightsjReserved.jMayjnotjbejcopied,jscanned,jorjduplicated,jinjwholejor
injpart,jexceptjforjusejasjpermittedjinjajlicensejdistributedjwithjajcertainjproductjorjservicejorjotherwisejonj
ajpassword-protectedjwebsitejforjclassroomjuse.