Health Economics and Policy Practice Exam Questions with Correct Answers

Health Economics and Policy Practice Exam Questions with Correct Answers cost-shifting - ANSWER-Charging higher prices for one category of patients in order to provide free or subsidized care to another group is called: According to economic theory, what is the optimal percentage of GDP to be spent on medical care? - ANSWER-No widely accepted way to determine the optimal percentage What phrase best describes medical care spending in the United States in 2015? - ANSWER-The total spending of more than $3 trillion represents over 17 percent of GDP and approximately $10,000 per person The 1974 federal legislation that exempted employers from certain state laws governing health insurance was: - ANSWER-ERISA The key elements of the Affordable Care Act (ACA) passed in 2010 included all of the following except - ANSWER-price controls on brand name pharmaceuticals Self-insurance refers to the practice of setting aside funds to pay for medical care expenses instead of paying premiums to an insurance company. Approximately, ______ of all employees who participate in group insurance plans work for firms that self-insure. - ANSWER-two-thirds For the past 40 years, growth in health care spending has outpaced growth in the rest of the economy by _____ percentage point(s) annually. - ANSWER-2-3 Even in the US, almost _____ percent of medical care is purchased through third party insurance. - ANSWER-90 The government share of health care spending in the US has increased from less than _____ percent in 1960 to approximately _____ percent in 2015. - ANSWER-20; 50 Opportunity cost measures: - ANSWER-foregone opportunities The opportunity cost of investing in a new lithotripter (a machine that pulverizes kidney stones with sound waves) is: - ANSWER-defined by the next best use of the money invested in the equipment. The "invisible hand" using Adam Smith's terminology refers to: - ANSWER-market forces working through the price mechanism Economists use the term "marginal" to describe costs and benefits - ANSWER-that are incremental and thus relevant to decision making According to recent public opinion polls, what percentage of Americans are satisfied with the quality of the medical care they receive? - ANSWER-70 % Within the framework of economics, optimization means providing a good or service until: - ANSWER-marginal benefits and marginal costs are equal. Which of the following statements is based on positive analysis? - ANSWER-High health care prices are one of the primary reasons that the U.S. spends more on medical care than other countries. positive statement - ANSWER-a factual claim about how the world actually works An inferior good: - ANSWER-is one where the demand curve shifts to the left when income goes up. Which of the following will not change the demand for office visits to the physician? - ANSWER-A change in the price of an office visit A physician's office expenses increase by 10 percent, so the doctor decides to raise the price of office visits. Assuming the demand curve for office visits does not shift, what will happen to the total number of office visits and practice revenues? - ANSWER-Office visits will fall and total revenue will rise if demand is inelastic. The price of services at Urban General falls by 10 percent. - ANSWER-Quantity demanded increases by 1.5 percent Suppose the demand curve for medical care services is perfectly inelastic. What will happen to the equilibrium price and quantity if supply increases? - ANSWER-Price will fall and quantity will stay the same ......