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HEALTHCARE ECONOMICS MIDTERM
REVIEW/ACTUAL EXAM QUESTIONS & ANSWERS
RATED 100% CORRECT!! Questions and Correct
Answers/ Latest Update / Already Graded
What proportion of the GDP is spent on healthcare?
Ans: 0.18
arc elasticity of demand
Ans: price elasticity calculated over a range of prices
True of False: Healthcare has an ELASTIC demand
Ans: False: Healthcare has an INELASTIC demand. Any value between 0 and -1
has an inelastic demand. This proposes that while healthcare demand does change
to price, the change is not significant enough for it to be considered elastic.
does price for care affect health?
Ans: Price alone does NOT affect ones health. However, other factors may
contribute to it affecting health such as low-income, or having high blood
pressure).
The Grossman Model (3 components)
Ans: Health plays as a:
Consumption Good
An input into Production
A form of Stock
Utility
© 2025/ 2026 | ® All rights reserved
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Ans: Usefulness; capable of satisfying wants and needs
H and X relationship (Ut=U(Ht, Xt))
Ans: H represents level of health
X represents home goods that contribute to usefulness and satisfaction (i.e video
games, time with friends)
Health Disparity
Ans: differences in health -- incidence, prevalence, mortality, and burden of
disease -- between specific populations
True or False: Educated individuals are more likely to live longer compared to HS
dropouts
Ans: TRUE
Why do disparities exist?
Ans: Early life events
Income levels
Stress of being poor
Work Capacity
Impatience
Adherence to Medical Advice
Which of the following is incorrect about US healthcare?
Ans: The projected health care spending as a share of GDP in 2025 is lower
than the current share
© 2025/ 2026 | ® All rights reserved
HEALTHCARE ECONOMICS MIDTERM
REVIEW/ACTUAL EXAM QUESTIONS & ANSWERS
RATED 100% CORRECT!! Questions and Correct
Answers/ Latest Update / Already Graded
What proportion of the GDP is spent on healthcare?
Ans: 0.18
arc elasticity of demand
Ans: price elasticity calculated over a range of prices
True of False: Healthcare has an ELASTIC demand
Ans: False: Healthcare has an INELASTIC demand. Any value between 0 and -1
has an inelastic demand. This proposes that while healthcare demand does change
to price, the change is not significant enough for it to be considered elastic.
does price for care affect health?
Ans: Price alone does NOT affect ones health. However, other factors may
contribute to it affecting health such as low-income, or having high blood
pressure).
The Grossman Model (3 components)
Ans: Health plays as a:
Consumption Good
An input into Production
A form of Stock
Utility
© 2025/ 2026 | ® All rights reserved
, 2 | Page
Ans: Usefulness; capable of satisfying wants and needs
H and X relationship (Ut=U(Ht, Xt))
Ans: H represents level of health
X represents home goods that contribute to usefulness and satisfaction (i.e video
games, time with friends)
Health Disparity
Ans: differences in health -- incidence, prevalence, mortality, and burden of
disease -- between specific populations
True or False: Educated individuals are more likely to live longer compared to HS
dropouts
Ans: TRUE
Why do disparities exist?
Ans: Early life events
Income levels
Stress of being poor
Work Capacity
Impatience
Adherence to Medical Advice
Which of the following is incorrect about US healthcare?
Ans: The projected health care spending as a share of GDP in 2025 is lower
than the current share
© 2025/ 2026 | ® All rights reserved
