LSUS MHA 710 ECONOMICS 1
PRACTICE EXAMINATION 2026
QUESTIONS WITH ANSWERS GRADED
A+
◍ A health insurance arrangement where individuals have access to health care
in exchange for a set premium is called: a. managed care organization..
Answer: third-party payment system.
◍ A health insurance arrangement where individuals have access to health care
in exchange for a set premium is called:.
Answer: Third-party payment system.
◍ What is the cumulative effect of a simultaneous increase in area income of 5
percent and a 10 percent increase in prices at Urban General?.
Answer: Quantity demanded at Urban General rises by 1 percent.
◍ Which of the following is NOT considered to be a factor in the recent
slowing of health care spending?.
Answer: Growing U.S. gross domestic product (GDP).
◍ The dead-weight loss from an excise tax:.
Answer: Is caused by a shift in consumer preferences when the tax is raised.
◍ Suppose you are a politician being criticized in a debate for your
commitment to reducing the growth of medical spending. Which of the
following is the most appropriate response?.
Answer: Reducing wasteful heath care spending could provide additional
funding to the education sector.
◍ Suppose robotic technology improves the results of abdominal
surgery—less time to perform the surgery, faster recovery times, and fewer
, mistakes. What is the impact on the market for abdominal surgery using this
new technology?.
Answer: Demand for robot-assisted surgery will increase.
◍ What term is used when physicians know more about alternative treatments
than their patients do?.
Answer: Asymmetric information.
◍ According to economic theory what is the optimal percentage of GDP to be
spent onmedical care?.
Answer: There is no widely accepted way to determine the optimal
percentage.
◍ Supply curves are positively sloped because of:.
Answer: The increasing opportunity cost of resources.
◍ Assuming that a market is perfectly competitive & in a state of equilibrium,
which of the following statements is always true when the price changes?.
Answer: Social welfare decreases.
◍ Charging higher prices for one category of patients in order to provide free
or subsidized care to another group is called.
Answer: cost shifting
◍ If price elasticity is known to be -0.15, what happens to quantity when the
price of services at Urban General falls by 10 percent?.
Answer: Quantity demanded increases by 1.5 percent.
◍ In the nation of Pavlova, a significant portion of the population suffers from
breathing difficulties later in life. Pavlova Medical produces the only
prescription drug that is effective in treating the condition. Which of the
following terms best describes the situation in the market?.
Answer: Monopoly.
◍ Suppose the
U. S. Drug Enforcement Agency steps up its efforts to control the illegal
importation of cocaine into the United States. What is the likely effect on
PRACTICE EXAMINATION 2026
QUESTIONS WITH ANSWERS GRADED
A+
◍ A health insurance arrangement where individuals have access to health care
in exchange for a set premium is called: a. managed care organization..
Answer: third-party payment system.
◍ A health insurance arrangement where individuals have access to health care
in exchange for a set premium is called:.
Answer: Third-party payment system.
◍ What is the cumulative effect of a simultaneous increase in area income of 5
percent and a 10 percent increase in prices at Urban General?.
Answer: Quantity demanded at Urban General rises by 1 percent.
◍ Which of the following is NOT considered to be a factor in the recent
slowing of health care spending?.
Answer: Growing U.S. gross domestic product (GDP).
◍ The dead-weight loss from an excise tax:.
Answer: Is caused by a shift in consumer preferences when the tax is raised.
◍ Suppose you are a politician being criticized in a debate for your
commitment to reducing the growth of medical spending. Which of the
following is the most appropriate response?.
Answer: Reducing wasteful heath care spending could provide additional
funding to the education sector.
◍ Suppose robotic technology improves the results of abdominal
surgery—less time to perform the surgery, faster recovery times, and fewer
, mistakes. What is the impact on the market for abdominal surgery using this
new technology?.
Answer: Demand for robot-assisted surgery will increase.
◍ What term is used when physicians know more about alternative treatments
than their patients do?.
Answer: Asymmetric information.
◍ According to economic theory what is the optimal percentage of GDP to be
spent onmedical care?.
Answer: There is no widely accepted way to determine the optimal
percentage.
◍ Supply curves are positively sloped because of:.
Answer: The increasing opportunity cost of resources.
◍ Assuming that a market is perfectly competitive & in a state of equilibrium,
which of the following statements is always true when the price changes?.
Answer: Social welfare decreases.
◍ Charging higher prices for one category of patients in order to provide free
or subsidized care to another group is called.
Answer: cost shifting
◍ If price elasticity is known to be -0.15, what happens to quantity when the
price of services at Urban General falls by 10 percent?.
Answer: Quantity demanded increases by 1.5 percent.
◍ In the nation of Pavlova, a significant portion of the population suffers from
breathing difficulties later in life. Pavlova Medical produces the only
prescription drug that is effective in treating the condition. Which of the
following terms best describes the situation in the market?.
Answer: Monopoly.
◍ Suppose the
U. S. Drug Enforcement Agency steps up its efforts to control the illegal
importation of cocaine into the United States. What is the likely effect on
