Economics EC248 – Quiz 9 – Practice Questions
An instructor was explaining the standard model for the demand and supply of health care to
her class. She was explaining how public health insurance did not result in the socially optimal
outcome. One of her students asked if there were any conditions to reduced the welfare loss to
society. All of the following EXCEPT could be included
externalities
moral hazard
imperfect competition
income effects - correct answer ✔✔ moral hazard
Evidence shows that administration costs are substantially lower in health care systems which
have public health insurance compare to those with private health insurance. This could be a
result of
moral hazard
adverse selection
economies of scale
externalities - correct answer ✔✔ economies of scale
When Jim's house got robbed Jim claimed the robbers took a very expensive watch his father
had left him even though he never had a very expensive watch. This is an example of:
ex post moral hazard
ex ante moral hazard
asymmetry of information
adverse selection - correct answer ✔✔ ex post moral hazard
Capacity control is
a demand side policy used in public health
An instructor was explaining the standard model for the demand and supply of health care to
her class. She was explaining how public health insurance did not result in the socially optimal
outcome. One of her students asked if there were any conditions to reduced the welfare loss to
society. All of the following EXCEPT could be included
externalities
moral hazard
imperfect competition
income effects - correct answer ✔✔ moral hazard
Evidence shows that administration costs are substantially lower in health care systems which
have public health insurance compare to those with private health insurance. This could be a
result of
moral hazard
adverse selection
economies of scale
externalities - correct answer ✔✔ economies of scale
When Jim's house got robbed Jim claimed the robbers took a very expensive watch his father
had left him even though he never had a very expensive watch. This is an example of:
ex post moral hazard
ex ante moral hazard
asymmetry of information
adverse selection - correct answer ✔✔ ex post moral hazard
Capacity control is
a demand side policy used in public health
