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ECON 610 CH 1 Questions

The document contains multiple choice questions about concepts in health economics including: price discrimination, optimal healthcare spending as a percentage of GDP, US healthcare spending in 2015, key provisions of the Affordable Care Act, self-insurance rates among employers, growth in healthcare spending compared to economic growth, rates of third party insurance, changes in government spending on healthcare over time, opportunity cost, the invisible hand concept, and public satisfaction with healthcare quality in the US.

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Katie Schulte
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76 views4 pages

ECON 610 CH 1 Questions

The document contains multiple choice questions about concepts in health economics including: price discrimination, optimal healthcare spending as a percentage of GDP, US healthcare spending in 2015, key provisions of the Affordable Care Act, self-insurance rates among employers, growth in healthcare spending compared to economic growth, rates of third party insurance, changes in government spending on healthcare over time, opportunity cost, the invisible hand concept, and public satisfaction with healthcare quality in the US.

Uploaded by

Katie Schulte
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Charging higher prices for one category of patients in order to provide free or subsidized care to

another group is called:


a. price discrimination.

b. creative accounting.

c. categorical costing.

d. cost-shifting.

e. reprehensible and unethical.


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According to economic theory, what is the optimal percentage of GDP to be spent on medical care?
a. 8 percent

b. 10 percent

c. Whatever amount we are currently spending

d. No widely accepted way to determine the optimal percentage

e. 12 percent
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What phrase best describes medical care spending in the United States in 2015?
a. The total spending of $1.5 trillion represents 13.6 percent of GDP and almost $5,000 per person.

b. The total spending of more than $3 trillion represents over 17 percent of GDP and approximately $10,000 per

person.

c. Total spending is rising at double-digit rates and spending is soaring to approximately $8,000 per person.

d. Total spending is under control and represents a shrinking percentage of GDP.

e. The total spending of more than $2 trillion represents 16 percent of GDP and almost $7,500 per person.
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The 1974 federal legislation that exempted employers from certain state laws governing health
insurance was:
a. SCHIP.

b. ERISA.

c. CON.

d. HIPAA.

e. COBRA.
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The key elements of the Affordable Care Act (ACA) passed in 2010 included all of the following
except:
a. a federal requirement that states extend Medicaid coverage to individuals with family income less than 138

percent of the federal poverty level.

b. the establishment of insurance exchanges where individuals who did not have access to employer-sponsored

insurance could receive subsidies to purchase private coverage.

c. a mandate that required every employer with over 50 full-time workers to provide a qualified health plan at an

affordable price, or face penalties.

d. expanded insurance regulations include guaranteed issue, guaranteed renewability, and no exclusions for pre-

existing conditions.

e. price controls on brand name pharmaceuticals.


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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, ______ of all employees who
participate in group insurance plans work for firms that self-insure.
a. one-half

b. three-fourths

c. one-fourth

d. one-third

e. two-thirds
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For the past 40 years, growth in health care spending has outpaced growth in the rest of the economy
by _____ percentage point(s) annually.
a. 2–3

b. 4–5

c. less than one

d. over 6
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Even in the US, almost _____ percent of medical care is purchased through third party insurance.
a. 100

b. 50

c. 65

d. 75

e. 90
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The government share of health care spending in the US has increased from less than _____ percent
in 1960 to approximately _____ percent in 2015.
a. 10;50

b. 20; 60

c. 10; 40

d. 5; 60

e. 30; 60
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Opportunity cost measures:
a. the difference between production cost and resource cost.

b. foregone opportunities.

c. total accounting cost.

d. value-based prices.

e. value in terms of the cost of production.


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The opportunity cost of investing in a new lithotripter (a machine that pulverizes kidney stones with
sound waves) is:
a. defined by the dollar cost of the equipment.

b. the same for every health care provider.

c. defined by the next best use of the money invested in the equipment.

d. measured by the difference between the expected revenues from selling the services of the lithotripter and the

invoice cost of the machine.

e. impossible to calculate.
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The "invisible hand" using Adam Smith's terminology refers to:
a. market forces working through the price mechanism.

b. the money supply that serves to keep the economy working smoothly.

c. government control of the market.

d. the role of innovation in maintaining a steady rate of growth.

e. "behind-the-scenes" policy making to influence how markets allocate scarce resources.


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Economists use the term "marginal" to describe costs and benefits:
a. that are noteworthy but not the most important.
b. whose importance can be minimized through hard work.

c. that are incremental and thus relevant to decision making.

d. that are minimal and hardly worth noting.

e. that are poorly defined.


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According to recent public opinion polls, what percentage of Americans are satisfied with the quality
of the medical care they receive?
a. 70 percent

b. 80 percent

c. 60 percent

d. 15 percent

e. 40 percent
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