MHA 710 Exam 3 LSUS latest update with 100%correct answers
Government regulators sometimes set the price of a drug at its marginal cost of production
without including a fair share of the global joint cost of research and development. Which of the
following statements is true about this practice? -(ANSWER) This practice is a classic example
of free riding.
What was the main effect of the agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS) on United States' domestic policy? -(ANSWER) It extended the life of patents
from 17 years from the date of grant to 20 years from the date of application.
The majority of pharmaceutical advertising is directed at which of the following groups? -
(ANSWER) Physicians
Part B pays what percentage of the allowable fee set by Medicare? -(ANSWER) 80%
By the time a drug enters the clinical trial phase of testing on humans, -(ANSWER) an average
of five years of the overall patent life has already expired
Finkelstein and McKnight (2008) provide an empirical estimate of the benefits to seniors of the
1965 introduction of Medicare. Which of the following statements is true concerning the results
of this study? -(ANSWER) The real impact of the introduction of Medicare was on the reduction
in out-of-pocket health care spending for households faced with catastrophic events (those in the
top 25 percent of spenders).
Which of the following services is covered under Part B of Medicare? -(ANSWER) Emergency
room services
Medicare and Medicaid were enacted by the Johnson administration in 1965 as amendments to
which federal law already in existence? -(ANSWER) Social Security Act
Medical care spending escalates as an individual reaches old age. Which of the following
statements is true regarding medical care spending and the elderly? -(ANSWER) Chronic
illnesses increase as we age as do the multiplicity of services available to treat those illnesses.
How much did pharmaceutical companies spend on direct-to-consumer advertising in 2019? -
(ANSWER) $6.1 billion
Danzon and Furukawa (2003) argue that: -(ANSWER) pharmaceutical price differences across
countries are roughly in line with differences in per capita gross domestic product, supporting the
predictions of Ramsey pricing practices.
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, How do individuals enroll in Part A of Medicare? -(ANSWER) Individuals are automatically
enrolled on their 65th birthday as long as they or their spouse has paid into the Social Security
system for 10 years
The tax fully dedicated to provide support for Medicare Part A is -(ANSWER) a 2.9 percent
payroll tax paid by all workers, regardless of their age.
Price controls are a common feature in the pharmaceutical industry in most developed countries.
Which one of the following statements about price controls is true? -(ANSWER) Countries with
the most stringent price controls do the least research.
The only disease-specific group eligible for Medicare are those suffering from: -(ANSWER)
end-stage renal disease.
The Medicare pay-as-you-go system is jeopardized by -(ANSWER) The changing demographics
of the United States' population, with an increasing percentage over the age of 65.
Which benefits are provided through Part A of Medicare? -(ANSWER) Medical hospital
insurance
On average, biopharmaceutical companies spend approximately what percentage of their sales
revenue on research and development? -(ANSWER) 15-20%
A type I error is: -(ANSWER) when a harmful drug is allowed into the market.
Economies of scale exist when: -(ANSWER) long-run average costs decline as output increases.
Suppose the market for nursing services in a local community is so dominated by a single
community hospital that, for all practical purposes, it is considered a monopsony. Using the
diagram below, answer the question.
If the market were perfectly competitive instead of dominated by a monopsonist, what would the
equilibrium wage and level of employment be? -(ANSWER) W1 and E1
Changes caused by the shift from charge-based rates to negotiated rates has had which of the
following results? -(ANSWER) Most hospitals experience a gap between the amount they
receive from their payers and the amount billed, with receipts as low as 20 percent of amount
billed.
What is the most significant cost of attending medical school? -(ANSWER) The income
foregone
Which of the following statements is true about cost shifting in hospitals? -(ANSWER) The
ability to cost shift depends on a hospital's payer mix.
Page | 2
Government regulators sometimes set the price of a drug at its marginal cost of production
without including a fair share of the global joint cost of research and development. Which of the
following statements is true about this practice? -(ANSWER) This practice is a classic example
of free riding.
What was the main effect of the agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS) on United States' domestic policy? -(ANSWER) It extended the life of patents
from 17 years from the date of grant to 20 years from the date of application.
The majority of pharmaceutical advertising is directed at which of the following groups? -
(ANSWER) Physicians
Part B pays what percentage of the allowable fee set by Medicare? -(ANSWER) 80%
By the time a drug enters the clinical trial phase of testing on humans, -(ANSWER) an average
of five years of the overall patent life has already expired
Finkelstein and McKnight (2008) provide an empirical estimate of the benefits to seniors of the
1965 introduction of Medicare. Which of the following statements is true concerning the results
of this study? -(ANSWER) The real impact of the introduction of Medicare was on the reduction
in out-of-pocket health care spending for households faced with catastrophic events (those in the
top 25 percent of spenders).
Which of the following services is covered under Part B of Medicare? -(ANSWER) Emergency
room services
Medicare and Medicaid were enacted by the Johnson administration in 1965 as amendments to
which federal law already in existence? -(ANSWER) Social Security Act
Medical care spending escalates as an individual reaches old age. Which of the following
statements is true regarding medical care spending and the elderly? -(ANSWER) Chronic
illnesses increase as we age as do the multiplicity of services available to treat those illnesses.
How much did pharmaceutical companies spend on direct-to-consumer advertising in 2019? -
(ANSWER) $6.1 billion
Danzon and Furukawa (2003) argue that: -(ANSWER) pharmaceutical price differences across
countries are roughly in line with differences in per capita gross domestic product, supporting the
predictions of Ramsey pricing practices.
Page | 1
, How do individuals enroll in Part A of Medicare? -(ANSWER) Individuals are automatically
enrolled on their 65th birthday as long as they or their spouse has paid into the Social Security
system for 10 years
The tax fully dedicated to provide support for Medicare Part A is -(ANSWER) a 2.9 percent
payroll tax paid by all workers, regardless of their age.
Price controls are a common feature in the pharmaceutical industry in most developed countries.
Which one of the following statements about price controls is true? -(ANSWER) Countries with
the most stringent price controls do the least research.
The only disease-specific group eligible for Medicare are those suffering from: -(ANSWER)
end-stage renal disease.
The Medicare pay-as-you-go system is jeopardized by -(ANSWER) The changing demographics
of the United States' population, with an increasing percentage over the age of 65.
Which benefits are provided through Part A of Medicare? -(ANSWER) Medical hospital
insurance
On average, biopharmaceutical companies spend approximately what percentage of their sales
revenue on research and development? -(ANSWER) 15-20%
A type I error is: -(ANSWER) when a harmful drug is allowed into the market.
Economies of scale exist when: -(ANSWER) long-run average costs decline as output increases.
Suppose the market for nursing services in a local community is so dominated by a single
community hospital that, for all practical purposes, it is considered a monopsony. Using the
diagram below, answer the question.
If the market were perfectly competitive instead of dominated by a monopsonist, what would the
equilibrium wage and level of employment be? -(ANSWER) W1 and E1
Changes caused by the shift from charge-based rates to negotiated rates has had which of the
following results? -(ANSWER) Most hospitals experience a gap between the amount they
receive from their payers and the amount billed, with receipts as low as 20 percent of amount
billed.
What is the most significant cost of attending medical school? -(ANSWER) The income
foregone
Which of the following statements is true about cost shifting in hospitals? -(ANSWER) The
ability to cost shift depends on a hospital's payer mix.
Page | 2
