Econ 365 Healthcare Economics Exam 1
According to the Grossman Model, education...
A. means more work, thus less time for health, so more educated people have poorer
health
B. increases productivity, thus shifting up the PPF, leading to better health
C. increases the ability to self diagnose, so it leads to better health
D. burdens people's mental capacity, so it decreases health - ANSWER-Answer: B
According to the PPF in the Grossman Model, if someone chooses the maximum health
point, then this person..
A. only cares about home good Z
B. only cares about health good H
C. cares about both Z and H
D. has a preference for Z and H that can only be identified with an indifference curve -
ANSWER-Answer: B
actuarially fair insurance - ANSWER-an insurance contract that yields zero profit in
expectation
Aging...
A. shifts the marginal efficiency of investment in health curve (MEC) inward
B. shifts the MEC outward
C. moves upward along the MEC
D. moves downward along the MEC - ANSWER-Answer: C
Asymmetric information - ANSWER-one party having more or better information than
the other
Barriers to entry - ANSWER-Obstacles set up to prevent competition from joining a
market
Collusion - ANSWER-Firms work together to raise joint profits at the cost of consumers
Consider two investment streams, w and z, which pay out some amount, w(t) and z(t),
in each period t (the amount may be negative in some periods). If the interest rate is
exactly equal to the internal rate of return of w(t), the net present value of choosing w
over z is...
A. positive
B. negative
C. zero
D. impossible to determine - ANSWER-Answer: C
Defensive Medicine - ANSWER-Deviations from optimal medical practice in order to
reduce the risk of conflict with patients, especially in the form of malpractice lawsuits
, Economists believe that the demand for health care is
A. perfectly inelastic
B. perfectly elastic
C. downward-sloping
D. impossible to determine - ANSWER-Answer: C
Expected income - ANSWER-The sum of the income from each of the possible
outcomes, weighted by each outcome's probability
Expected profits (for insurance) - ANSWER-The sum of the profits from each of the
possible outcomes, weighted by each outcome's probability
Expected utility - ANSWER-The sum of the satisfaction from each of the possible
outcomes weighted by each outcome's probability
Full insurance - ANSWER-an insurance contract that yields different income depending
on the state of health
Health disparities exist...
A. only in the United States
B. only outside the United States
C. In all societies
D. Only in liberal scientist's biased study - ANSWER-Answer: C
Herfindahl-Hirschman Index - ANSWER-A measure of the competitiveness of a market
Hospitals in the United States...
A. have always been the choice of patients for health care
B. are all privately owned
C. face a very competitive market
D. used to be avoided by people with recourses because of its poor environment and
care - ANSWER-Answer: D
How soon after medical school can physicians in the United States be licensed to
practice?
A. at least 3 years of residency is required
B. after 1 year residency
C. as soon as they graduate from medical school
D. it depends on their specialty - ANSWER-Answer:
NOT D
If a patient with no ability to pay visits an ER at a hospital...
A. he can legally be denied of care
B. he will be covered by Medicare and Medicaid
According to the Grossman Model, education...
A. means more work, thus less time for health, so more educated people have poorer
health
B. increases productivity, thus shifting up the PPF, leading to better health
C. increases the ability to self diagnose, so it leads to better health
D. burdens people's mental capacity, so it decreases health - ANSWER-Answer: B
According to the PPF in the Grossman Model, if someone chooses the maximum health
point, then this person..
A. only cares about home good Z
B. only cares about health good H
C. cares about both Z and H
D. has a preference for Z and H that can only be identified with an indifference curve -
ANSWER-Answer: B
actuarially fair insurance - ANSWER-an insurance contract that yields zero profit in
expectation
Aging...
A. shifts the marginal efficiency of investment in health curve (MEC) inward
B. shifts the MEC outward
C. moves upward along the MEC
D. moves downward along the MEC - ANSWER-Answer: C
Asymmetric information - ANSWER-one party having more or better information than
the other
Barriers to entry - ANSWER-Obstacles set up to prevent competition from joining a
market
Collusion - ANSWER-Firms work together to raise joint profits at the cost of consumers
Consider two investment streams, w and z, which pay out some amount, w(t) and z(t),
in each period t (the amount may be negative in some periods). If the interest rate is
exactly equal to the internal rate of return of w(t), the net present value of choosing w
over z is...
A. positive
B. negative
C. zero
D. impossible to determine - ANSWER-Answer: C
Defensive Medicine - ANSWER-Deviations from optimal medical practice in order to
reduce the risk of conflict with patients, especially in the form of malpractice lawsuits
, Economists believe that the demand for health care is
A. perfectly inelastic
B. perfectly elastic
C. downward-sloping
D. impossible to determine - ANSWER-Answer: C
Expected income - ANSWER-The sum of the income from each of the possible
outcomes, weighted by each outcome's probability
Expected profits (for insurance) - ANSWER-The sum of the profits from each of the
possible outcomes, weighted by each outcome's probability
Expected utility - ANSWER-The sum of the satisfaction from each of the possible
outcomes weighted by each outcome's probability
Full insurance - ANSWER-an insurance contract that yields different income depending
on the state of health
Health disparities exist...
A. only in the United States
B. only outside the United States
C. In all societies
D. Only in liberal scientist's biased study - ANSWER-Answer: C
Herfindahl-Hirschman Index - ANSWER-A measure of the competitiveness of a market
Hospitals in the United States...
A. have always been the choice of patients for health care
B. are all privately owned
C. face a very competitive market
D. used to be avoided by people with recourses because of its poor environment and
care - ANSWER-Answer: D
How soon after medical school can physicians in the United States be licensed to
practice?
A. at least 3 years of residency is required
B. after 1 year residency
C. as soon as they graduate from medical school
D. it depends on their specialty - ANSWER-Answer:
NOT D
If a patient with no ability to pay visits an ER at a hospital...
A. he can legally be denied of care
B. he will be covered by Medicare and Medicaid
