MHA710 EXAM 1 | COMPREHENSIVE
QUESTIONS AND ANSWERS
(LATEST UPDATE 2025)
A physician's office expenses increase by 10%, 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 toal number of office visit and practice revenues. - Answer-Office visits
will fall and total revenue will rise is demand is inelastic
How different is medical care from other commodities? Arrow based his thesis on a
number of characteristics that contribute to the unique nature of medical care. All of the
following characteristics were listed by Arrow, except: - Answer-Preponderance of not-
for-profit providers
An inferior good: - Answer-causes the demand curve to shift to the left when income
rises
If a hospital is experiencing economies of scale: - Answer-Its average cost curve is
negatively sloped as output increase
An inferior good - Answer-has a negative income elasticity and 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 visit to the physician? -
Answer-A change in the price of an office visit.
Which of the following will not cause a shift in the medical care supply curve? - Answer-
A change in the % of the population with health insurance
Supply curves are positively sloped because of? - Answer-The law of diminishing
returns
A shortage of hospital beds will likely lead to - Answer-An increase in the price of a
hospital stay
When a physician knows more about alternative treatments than her patients, we say
that ________ exisit - Answer-Asymmetric information
Under which circumstance is the principal-agent problem likely to be most serious? -
Answer-Between surgeons and patients
, A patient has a medical condition, but he doesn't know what is is. The physician he sees
diagnoses his illness correctly. What terms applies to this situation - Answer-
Asymmetric information
The market for medical care relies primarily on - Answer-Not for porfit providers
Which of the following results from providers having more information about treatment
alternatives tan their patients? - Answer-Principle agent problem
Nonexcludable and nonrival goods are known as - Answer-Public Good
The optimal level of output may be defined as that level of output where - Answer-the
marginal benefit of the last unit purchased equals its marginal cost
Opportunity cost is a measure of - Answer-foregone opportunities and value based on
the alternative not chosen
The oppurtunity cost of investing in a new lithotripter is - Answer-Defined by the next
best use of the money invested in the equipment
What percentage of Americans considered the complete repeal of the Patient Protection
and ACA of 2010 a good thing? - Answer-40%
By 2020, what was the forecasted % amount of health care spending paid by individuals
- Answer-10.4
According to recent public opinion polls, what percentage of Americans are satisfied
with the quality of the medical care they receive? - Answer-70%
According to economic theory what is the optimal percentage of GDP to be spent on
medical care? - Answer-There is no widely accepted way to determine the optimal
percentage.
Economists use the term marginal to describe costs and benefits - Answer-that are
incremental and thus relevant to decision making
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, how
many of all employees who participate in group insurance plans work for firms that self-
insure? - Answer-two-thirds
In spite of its early popularity, the Patient Protection and Affordable Care Act of 2010
(ACA) had not improved by 2020. What percentage of Americans considered its
complete repeal a good thing? - Answer-40
QUESTIONS AND ANSWERS
(LATEST UPDATE 2025)
A physician's office expenses increase by 10%, 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 toal number of office visit and practice revenues. - Answer-Office visits
will fall and total revenue will rise is demand is inelastic
How different is medical care from other commodities? Arrow based his thesis on a
number of characteristics that contribute to the unique nature of medical care. All of the
following characteristics were listed by Arrow, except: - Answer-Preponderance of not-
for-profit providers
An inferior good: - Answer-causes the demand curve to shift to the left when income
rises
If a hospital is experiencing economies of scale: - Answer-Its average cost curve is
negatively sloped as output increase
An inferior good - Answer-has a negative income elasticity and 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 visit to the physician? -
Answer-A change in the price of an office visit.
Which of the following will not cause a shift in the medical care supply curve? - Answer-
A change in the % of the population with health insurance
Supply curves are positively sloped because of? - Answer-The law of diminishing
returns
A shortage of hospital beds will likely lead to - Answer-An increase in the price of a
hospital stay
When a physician knows more about alternative treatments than her patients, we say
that ________ exisit - Answer-Asymmetric information
Under which circumstance is the principal-agent problem likely to be most serious? -
Answer-Between surgeons and patients
, A patient has a medical condition, but he doesn't know what is is. The physician he sees
diagnoses his illness correctly. What terms applies to this situation - Answer-
Asymmetric information
The market for medical care relies primarily on - Answer-Not for porfit providers
Which of the following results from providers having more information about treatment
alternatives tan their patients? - Answer-Principle agent problem
Nonexcludable and nonrival goods are known as - Answer-Public Good
The optimal level of output may be defined as that level of output where - Answer-the
marginal benefit of the last unit purchased equals its marginal cost
Opportunity cost is a measure of - Answer-foregone opportunities and value based on
the alternative not chosen
The oppurtunity cost of investing in a new lithotripter is - Answer-Defined by the next
best use of the money invested in the equipment
What percentage of Americans considered the complete repeal of the Patient Protection
and ACA of 2010 a good thing? - Answer-40%
By 2020, what was the forecasted % amount of health care spending paid by individuals
- Answer-10.4
According to recent public opinion polls, what percentage of Americans are satisfied
with the quality of the medical care they receive? - Answer-70%
According to economic theory what is the optimal percentage of GDP to be spent on
medical care? - Answer-There is no widely accepted way to determine the optimal
percentage.
Economists use the term marginal to describe costs and benefits - Answer-that are
incremental and thus relevant to decision making
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, how
many of all employees who participate in group insurance plans work for firms that self-
insure? - Answer-two-thirds
In spite of its early popularity, the Patient Protection and Affordable Care Act of 2010
(ACA) had not improved by 2020. What percentage of Americans considered its
complete repeal a good thing? - Answer-40
