Ashworth HE360 Exam 7 2018

Question 1 of 40 5.0/ 5.0 Points

Suppose, in the figure above that the rate regulator imposes price I. In response, the monopolist will:

A. lower price and increase quantity, leading to increased consumer surplus.

B. increase price and decrease quantity, leading to decreased consumer surplus.

C. keep quantity the same and accept reduced profits.

D. cease producing the good.

Question 2 of 40 5.0/ 5.0 Points

The Hawaii’s Keiki (Child) Care insurance program was halted because:

A. the program apparently crowded out other insurance coverage.

B. the program turned out a large and lucrative revenue flow.

C. there was extensive fraud in the program.

D. there were not personnel available to run the program.

Question 3 of 40 5.0/ 5.0 Points

Prospective payment generally reimburses hospitals at a/an:

A. sliding rate based on the hospital’s profitability.

B. increasing rate depending on the length of stay.

C. decreasing rate depending on the length of stay.

D. fixed rate.

Question 4 of 40 5.0/ 5.0 Points

Under the Patient Protection and Affordable Care Act, passed in 2010:

A. all residents will get health insurance by 2013.

B. all residents will get health insurance by 2016.

C. about 32 million of the 50 million uninsured (in 2010-2011) will get health insurance by 2020.

D. There is no firm timetable for universal health insurance.

Question 5 of 40 5.0/ 5.0 Points

Medicaid is particularly attractive to the states because:

A. it provides additional funds for the purchase of services for the poor.

B. it effectively raises the price per unit of medical care to the poor.

C. it increases the size of state governments.

D. the federal government pays for and provides specific guidelines as to how the money is allocated.

Question 6 of 40 5.0/ 5.0 Points

Medicare Part D provides improved coverage focusing on:

A. nursing home care.

B. pharmaceutical expenditures.

C. chronic illness.

D. managed care.

Question 7 of 40 0.0/ 5.0 Points

In the figure above, the welfare loss of monopoly is triangle:

A. ABC.

B. CDE.

C. EFG.

D. AIJ.

Question 8 of 40 5.0/ 5.0 Points

Analysts believe that Medicare’s share of GDP will rise because:

A. of increased numbers of beneficiaries.

B. of decreased costs per beneficiary.

C. of fraud in the Medicare system.

D. Medicaid is being phased out.

Question 9 of 40 5.0/ 5.0 Points

Under Shleifer’s yardstick pricing scheme:

A. hospitals achieve a Nash equilibrium because their own costs do not enter the optimization process.

B. hospitals will only participate if they will not lose profits.

C. the hospitals have an incentive to overstate their costs.

D. hospitals receive a qualitative equilibrium related to their costs.

Question 10 of 40 5.0/ 5.0 Points

Davis and Reynolds found that public assistance related to Medicare and Medicaid __________ health care utilization for recipients relative to those who did not receive public assistance.

A. increased

B. decreased

C. had no impact on

D. accelerated

Question 11 of 40 5.0/ 5.0 Points

Analysts believe that in the economic downturn of 2000-2003:

A. the number of uninsured did not change much because people bought more private insurance.

B. the number of uninsured did not rise much because employers provided more health insurance.

C. Medicaid take-up provided insurance for many who would have otherwise gone without insurance.

D. many households voluntarily reduced their health insurance.

Question 12 of 40 5.0/ 5.0 Points

In the figure above, box BCDH represents: ?

A. a revenue transfer from consumers to producers under monopoly.

B. part of the welfare loss of monopoly.

C. a result of rate regulation.

D. a revenue rebate from producers to consumers.

Question 13 of 40 5.0/ 5.0 Points

Within the past 20 years Medicaid has increasingly become the source of payment for:

A. pharmaceuticals.

B. the elderly.

C. long-term nursing home care.

D. industry regulators.

Question 14 of 40 5.0/ 5.0 Points

The Medicare Part D “doughnut hole” means that?

A. diet plans are not covered.

B. at a specified level of expenditures, the consumers’incremental share jumps to near 100 percent.

C. the costs will put the system in financial jeopardy.

D. patients who do not maintain a healthy weight will be responsible for copayments.

Question 15 of 40 5.0/ 5.0 Points

Analysts expect the total number of Medicare beneficiaries to rise between the years 2010 and 2040, by approximately __________ million people.

A. 14

B. 21

C. 37

D. 40

Question 16 of 40 5.0/ 5.0 Points

Referring to the diagram above, suppose that UA and UB represent the preferences of Persons A and B for health insurance and all other goods. If I0 represents the minimum coverage available:

A. both will buy the minimum insurance.

B. Person A will buy more than I0 and Person B will be uninsured.

C. Person A and Person B will both buy health insurance.

D. Person A will buy the minimum insurance and Person B will be uninsured.

Question 17 of 40 5.0/ 5.0 Points

In evaluating mergers, regulators must often evaluate the trade-off between __________ and __________.

A. economies of scale; monopoly power

B. economies of scope; monopolistic competition

C. technological change; market competition

D. economies of scale; economies of scope

Question 18 of 40 5.0/ 5.0 Points

Referring to the figure above, increased insurance coverage (more recipients and more generous coinsurance) leads to a shift from __________ in health expenditures.

A. point A to point B and a decrease

B. point A to point B and an increase

C. point B to point C and an increase

D. point A to point C, and a decrease

Question 19 of 40 5.0/ 5.0 Points

Currie and Gruber have found that Medicaid programs often lead to improvements in measures of health such as infant mortality rates. They tend to be expensive, however leading to questions of program viability as measured by:

A. cost-benefit ratios.

B. economic efficiency.

C. cost-utility analysis.

D. cost-effectiveness.

Question 20 of 40 5.0/ 5.0 Points

Refer to the figure above. Under monopolistic pricing the hospital will produce __________ where __________.

A. Q₁; marginal revenue equals marginal cost

B. Q₁; marginal revenue equals average cost

C. Q₂; prospective cost equals demand price

D. Q₃; demand is satisfied

Part 2 of 2 - 75.0/ 100.0 Points

Question 21 of 40 5.0/ 5.0 Points

Suppose a worker earns $15 per hour plus health benefits worth $2 per hour. If the employer withdraws the benefits and offers the worker $16 per hour the worker will be:

A. better off because $16 is more than $15.

B. as well off because he or she is earning more than before.

C. worse off because previously he or she was earning $17 including the benefit, but is now only earning $16.

D. better off because previously he or she was earning $16 including the benefit, but is now earning $17.

Question 22 of 40 5.0/ 5.0 Points

In the figure above, loosening supplier regulations could move an equilibrium from point __________ to point __________.

A. B; A

B. C; E

C. E; C

D. E; A

Question 23 of 40 0.0/ 5.0 Points

Many of the more industrialized countries have sought to reform their health care systems by introducing elements of: ?

A. market mechanisms.

B. rationing.

C. price controls.

D. government service provision.

Question 24 of 40 0.0/ 5.0 Points

In monopsonistic health care systems, expenditures are lower because:

A. providers give lower quality care.

B. providers are paid below-market wages.

C. system administrators extract economic rents from the health care providers.

D. system administrators extract economic rents from the patients directly through payments.

Question 25 of 40 5.0/ 5.0 Points

In the figure above, if the administered price P* in the NHS were to be raised we might expect:

A. price in the private market to rise.

B. price in the public market to fall.

C. excess demand in the NHS sector to fall.

D. excess demand in the public sector to fall.

Question 26 of 40 5.0/ 5.0 Points

In the United States, employer-provided health insurance distorts the choice between health care and other items because: ?

A. health insurance may lead to over-consumption of health care due to moral hazard.

B. employer contributions are tax exempt, thus reducing the price of insurance relative to other goods.

C. employer contributions are taxed, thus increasing the price of insurance relative to other goods.

D. workers believe that the health insurance is free.

Question 27 of 40 0.0/ 5.0 Points

In the figure above, the supply curve for a national health service is drawn vertically because:

A. demand does not equal supply.

B. quantity supplied is unresponsive to price.

C. price is administered at P.

D. price is determined at P.

Question 28 of 40 5.0/ 5.0 Points

Pay for performance (P4P) plans:

A. have proven successful in reducing health expenditures.

B. require detailed performance measures to be successful.

C. have improved the Canadian health care system.

D. will always increase health care quality.

Question 29 of 40 5.0/ 5.0 Points

In the figure above, starting at point A, a move to point B'' increases:

A. efficiency only if financed by taxes.

B. efficiency only if paid for by employers.

C. efficiency only if accompanied by technological change.

D. efficiency.

Question 30 of 40 5.0/ 5.0 Points

Consider the figure above. Which of the following points constitute inefficient allocations of the economy’s resources? ?

A. A

B. B'

C. D

D. E

Question 31 of 40 5.0/ 5.0 Points

Total expenditure for universal health insurance would __________ the true cost because __________.

A. overstate; the uninsured are already receiving uncompensated care

B. understate; employers would lose money

C. precisely estimate; we have good estimates of health care costs

D. understate; insurers could not offer this coverage without a subsidy

Question 32 of 40 5.0/ 5.0 Points

In the figure above, starting at point A, if health reform moves the economy to point __________ it __________ efficiency?

A. J; increases

B. B'; increases

C. B; increases

D. D; decreases

Question 33 of 40 5.0/ 5.0 Points

In the figure above, if mandated insurance benefits increase marginal costs to MC 2 , the firm will:

A. pass all of the increased costs along to the consumers in the form of increased prices.

B. optimize at point C, passing on part of the cost increases to the consumers by raising the price from P₂ to P₁.

C. take advantage of economies of scale by reducing the price from P2 to P3.

D. optimize at point A where MC1 equals demand.

Question 34 of 40 5.0/ 5.0 Points

Critics of the U.S. health care system argue that the Canadian single-payer system has lower administrative costs. Estimates of the potential cost savings from a Canadian system range from:

A. zero – it would provide no savings.

B. $28 to 45 per person.

C. $489 to $752 per person.

D. $1,085 to $1,511 per person.

Question 35 of 40 5.0/ 5.0 Points

Under the Patient Protection and Affordable Care Act:

A. all U.S. residents will receive health insurance by 2018.

B. all U.S. citizens will receive health insurance by 2018.

C. approximately 32 million of the 50 million uninsured in 2010-2011 will receive health insurance by 2018.

D. the U.S. government will provide health care to all citizens by 2018.

Question 36 of 40 5.0/ 5.0 Points

Gordon developed a typology of health care systems. They include traditional sickness insurance, national health insurance, __________, and __________.

A. national health services; mixed systems

B. socialized health insurance; private systems

C. Medicare; Medicaid

D. entitlements; means-tested programs

Question 37 of 40 0.0/ 5.0 Points

In the figure above, an increase in demand in the NHS system will:

A. increase the administered price.

B. increase excess demand in the NHS market.

C. increase demand in the private market.

D. increase demand in the public market.

Question 38 of 40 5.0/ 5.0 Points

In monopolistic health care systems, expenditures are higher because providers:

A. give higher quality care.

B. extract monopoly rents from the payers.

C. offer too many services.

D. increase their quantity of services and give higher quality care.

Question 39 of 40 5.0/ 5.0 Points

Individual insurance mandates require:

A. taxpayers to enroll in government-sponsored insurance.

B. taxpayers to buy insurance from private sellers.

C. all consumers to get insurance, whether from employers, the private market, or the government.

D. employers to stop offering insurance.

Question 40 of 40 0.0/ 5.0 Points

The Chinese health care system has changed since the 1970s from a:

A. centralized command system to a more privatized system with smaller subsidies.

B. centralized command system to a national health care system.

C. national health insurance system to a national health care system.

D. “mixed” health care system to a centralized command system.