Deck 10: Life, Health, and Health Care

Question 1

If a healthy year is valued at 1, an inactive year is valued at .75, and each healthy year is worth $50,000, what are the (undiscounted) health benefits of a policy that adds 2 healthy years and 2 inactive years to one's life?

A)$3.50
B)$175,000
C)$250,000
D)Infinity

Answer 1

C

Question 2

Which one of the following is NOT one of the market imperfections in the health care market?

A)Unequal insurance coverage across states
B)The external harms of infectious disease
C)Unequally distributed information favoring doctors
D)Financial externalities caused by hospital "cost shifting"

Answer 2

A

Question 3

[insert Figure 10-4B or Figure 10-4 without the answers at the bottom]
If point A is on the full-cost budget line, which of the budget line points in Figure 10-4 represents (1) a co-payment and 2) an annual premium with free visits?

A)B is the co-payment, and D is the premium
B)E is the co-payment, and C is the premium
C)D is the co-payment, and E is the premium
D)C is the co-payment and B is the premium

Answer 3

A

Question 4

The formula for calculating the value of life is

A)Prayer and reflection
B)Average income x average length of life
C)∆Income/∆death risk
D)∆Income x ∆death risk

Question 5

The measure of health benefits discussed in the chapter is known as

A)Present value discounting
B)Qualitatively Analyzed Life Value
C)Health-related decision trees
D)Quality-Adjusted Life Years

Question 6

Which is the common but more official name for 'Obamacare"

A)The Abominable Care Act
B)The Efficient Care Act
C)The Equitable Care Act
D)The Affordable Care Act
E)The Train Wreck

Question 7

Child safety seats make more sense in autos than in airplanes because

A)Crashes are more common in autos
B)Safety seats are less likely to save lives in an airplane crash
C)The cost of an extra airline seat may cause people to travel in more dangerous ways
D)All of the above
E)None of the above, child safety seats make sense in both.

Question 8

Studies of willingness to pay for non-monetary benefits or costs through wages, travel costs, etc.are referred to as

A)Contingent valuation studies
B)Benefit cost studies
C)Revealed preference studies
D)Policy studies

Question 9

A statistical life is

A)The average risk of death associated with a given action
B)A life that might be lost due to a risky activity, but cannot be identified
C)The standard deviation of the average years of life
D)A life with unusual levels of risk

Question 10

Which of the following managed care organizations is most common in the U.S.as of 2014?

A)Health Management Organization
B)Preferred Provider Organization
C)High Deductible Plan
D)Weight Watchers International

Question 11

Which one of the following is NOT a common criticism of the discounted future earnings measure of the value of life?

A)It is often used in lawsuits
B)It ignores non-work aspects of life
C)It can discriminate against low income groups
D)It can discriminate against the elderly
E)None of the above.All are legitimate criticisms.

Question 12

If Jane is willing to pay $200 for shoes that reduce her risk of death from sore feet by .0001 (1/10,000), what is her implied value of life?

A)$200,000
B)$1,000,000
C)$2,000,000
D)$10,000
E)Infinity