Health economics and policy
Health Economics and Policy 8th edition Midterm 2025
Exam based questions and correct answers
Cost-shifting - ✔✔✔Charging higher prices for one category of patients in order to provide
free or subsidized care to another group is called:
If a hospital is experiencing economies of scale, - ✔✔✔its average cost curve is negatively
sloped as output increases
The optimal level of output may be defined as that level of output where: - ✔✔✔the marginal
benefit of the last unit purchased equals its marginal cost
Inoculation programs against certain diseases such as small pox, polio, and whooping cough
create - ✔✔✔positive externalities in consumption
When a physician knows more about alternative treatments than her patients do, we say that
_______ exists. - ✔✔✔asymmetric information
Government decision makers worldwide are concerned with the excessive growth in medical
care spending. When looking for areas to cut, they typically rely on the low-hanging fruit,
which includes: - ✔✔✔end-of-life care
Researchers use cost-of-illness studies for all of the following except to: - ✔✔✔compare the
relative efficiency of treating various conditions
The primary tasks required to conduct a successful cost effectiveness study are all of the
following except: - ✔✔✔identifying the overall cost of a health condition on society
@ pg. 1
, Health economics and policy
The first country to require standardized cost-effectiveness analysis before a pharmaceutical
drug would be approved for distribution and reimbursement was: - ✔✔✔Australia.
One of the considerations when relying exclusively on cost-effectiveness analysis (CEA) to
determine whether a category of people receives an expensive, potentially life-saving,
intervention is: - ✔✔✔CEA ignores the possibility that certain unidentified individuals in a
group may have a greater than normal positive response to the treatment.
The top ten causes of death in the United States in 2014 included all of the following but: -
✔✔✔AIDS.
The number one cause of death in the United States was _______ in 1980. By 2014, it was
_______. - ✔✔✔heart disease; heart disease
The concept quality-adjusted life year (QALY): - ✔✔✔is used extensively to evaluate
medical care resource allocation within government-run programs on fixed budgets, especially
in Europe.
Which of the following is least responsible for the reduction in mortality rates in Europe and
North America? - ✔✔✔More effective medical interventions
A critical assumption in the model of demand and supply is the independence of the demand
and supply curves. If the two are not independent from each other, a shift in the supply curve
can lead to a shift in the demand curve referred to as: - ✔✔✔supplier-induced demand.
There are substantial differences in medical care use by demographic characteristics such as
age, sex, and marital status. Which of the following statements is true? - ✔✔✔Adult women
spend more money on medical care than men do
@ pg. 2
Health Economics and Policy 8th edition Midterm 2025
Exam based questions and correct answers
Cost-shifting - ✔✔✔Charging higher prices for one category of patients in order to provide
free or subsidized care to another group is called:
If a hospital is experiencing economies of scale, - ✔✔✔its average cost curve is negatively
sloped as output increases
The optimal level of output may be defined as that level of output where: - ✔✔✔the marginal
benefit of the last unit purchased equals its marginal cost
Inoculation programs against certain diseases such as small pox, polio, and whooping cough
create - ✔✔✔positive externalities in consumption
When a physician knows more about alternative treatments than her patients do, we say that
_______ exists. - ✔✔✔asymmetric information
Government decision makers worldwide are concerned with the excessive growth in medical
care spending. When looking for areas to cut, they typically rely on the low-hanging fruit,
which includes: - ✔✔✔end-of-life care
Researchers use cost-of-illness studies for all of the following except to: - ✔✔✔compare the
relative efficiency of treating various conditions
The primary tasks required to conduct a successful cost effectiveness study are all of the
following except: - ✔✔✔identifying the overall cost of a health condition on society
@ pg. 1
, Health economics and policy
The first country to require standardized cost-effectiveness analysis before a pharmaceutical
drug would be approved for distribution and reimbursement was: - ✔✔✔Australia.
One of the considerations when relying exclusively on cost-effectiveness analysis (CEA) to
determine whether a category of people receives an expensive, potentially life-saving,
intervention is: - ✔✔✔CEA ignores the possibility that certain unidentified individuals in a
group may have a greater than normal positive response to the treatment.
The top ten causes of death in the United States in 2014 included all of the following but: -
✔✔✔AIDS.
The number one cause of death in the United States was _______ in 1980. By 2014, it was
_______. - ✔✔✔heart disease; heart disease
The concept quality-adjusted life year (QALY): - ✔✔✔is used extensively to evaluate
medical care resource allocation within government-run programs on fixed budgets, especially
in Europe.
Which of the following is least responsible for the reduction in mortality rates in Europe and
North America? - ✔✔✔More effective medical interventions
A critical assumption in the model of demand and supply is the independence of the demand
and supply curves. If the two are not independent from each other, a shift in the supply curve
can lead to a shift in the demand curve referred to as: - ✔✔✔supplier-induced demand.
There are substantial differences in medical care use by demographic characteristics such as
age, sex, and marital status. Which of the following statements is true? - ✔✔✔Adult women
spend more money on medical care than men do
@ pg. 2
