Question 1

Some economists and policymakers who are in favor of government-provided health care believe that providing health care will

Accepted Answer

Providing government-provided health care can potentially reduce asymmetric information in the health care market. This is because the government can collect and share information about health care providers and treatment options, which can help consumers make more informed decisions and reduce information asymmetry between providers and consumers. Moral hazard, negative externalities, and adverse selection can still exist in government-provided health care, but reducing asymmetric information can potentially mitigate some of these issues.

Question 2

Under the Patient Protection and Affordable Care Act (ACA),individuals who do not have health insurance will be subject to a fine.

Accepted Answer

This is known as the individual mandate, which requires most individuals to have health insurance or pay a penalty (also known as the shared responsibility payment).

Question 3

Those who favor changes in the market for health care that would make it more like the markets for other goods and services favor what are generally known as market-based reforms.

Accepted Answer

Market-based reforms aim to introduce competition and incentives, similar to other markets, to improve efficiency and lower costs in the health care market.

Question 4

A decrease in the availability of lower-cost drugs will tend to shift the ________ curve for medical services to the ________.

Accepted Answer

The answer of A decrease in the availability of lower-cost...

Question 5

About ________ of pharmaceutical patents are issued to U.S.firms.

Accepted Answer

According to the World Intellectual Property Organization, about two-thirds (or 66%) of pharmaceutical patents are issued to U.S. firms.

Question 6

Economists John Cogan,Glenn Hubbard,and Daniel Kessler have estimated that ________ the tax preference for employer-provided health insurance would reduce spending by people enrolled in these programs by 33 percent.

Accepted Answer

Repealing the tax preference for employer-provided health insurance would reduce spending by people enrolled in these programs by 33 percent, according to the economists mentioned.

Question 7

The individual mandate provision of the ACA requires

Accepted Answer

The individual mandate provision of the ACA (Affordable Care Act) requires every U.S. resident to have health insurance, either through their employer, government programs like Medicare/Medicaid, or purchasing insurance on their own. Failure to comply with this requirement results in a tax penalty.

Question 8

Most employees ________ on the value of health insurance provided by employers,and most people ________ when buying individual health insurance policies.

Accepted Answer

The answer of Most employees ________ on the value of...

Question 9

The Congressional Budget Office estimates that the additional taxes and fees enacted under the ACA will not even cover half of the true cost of the ACA.

Accepted Answer

The answer of The Congressional Budget Office estimates that the...

Question 10

If consumers paid the full price of medical services instead of using health insurance and third-party payers to cover part of the cost,the quantity of medical services provided would decrease.

Accepted Answer

This is because consumers would become more cost-conscious and would only choose to receive medical services that they truly need or that they can afford. Without the assistance of insurance and third-party payers, individuals may be more prone to seeking cheaper or alternative forms of treatment or may choose to forego medical services altogether if they are unable or unwilling to pay the full cost out-of-pocket.

Question 11

Replacing employment-based health care with a government-run system could reduce employers payments for their workers insurance,but the amount that they would have to pay in overall compensation

Accepted Answer

Replacing employment-based health care with a government-run system might shift the form of compensation (from health insurance to possibly higher wages or other benefits) but the overall compensation cost to employers would likely remain essentially unchanged. Employers would still need to offer competitive compensation packages to attract and retain employees.

Question 12

The rising cost of uninsured patients receiving treatment at hospital emergency rooms is one of the leading causes of the increase in health care spending as a percentage of GDP in the United States.

Accepted Answer

The answer of The rising cost of uninsured patients receiving...

Question 13

"Cost disease" refers to the tendency for high productivity in the service sector to lead to lower costs in those industries.

Accepted Answer

"Cost disease" actually refers to the phenomenon where the cost of labor-intensive sectors such as healthcare, education, and the arts increase over time, even though productivity remains unchanged, because wages in these sectors are forced up by rising wages in other sectors where productivity is improving rapidly.

Question 14

Lower deductibles for employer-provided health care will tend to shift the ________ curve for medical services to the ________.

Accepted Answer

Lower deductibles for employer-provided health care mean that the out-of-pocket costs for patients are reduced, which increases the demand for medical services. This leads to a rightward shift in the demand curve.

Question 15

A goal of ________ is to give patients an incentive to pay more attention to the prices of medical services.This would tend to increase economic efficiency by decreasing the costs of medical services.

Accepted Answer

Market-based reforms of the health care system aim to introduce competition and create incentives for patients to seek out more cost-effective options for medical services. This can ultimately lead to a decrease in the overall costs of medical services. The Patient Protection and Affordable Care Act (ACA) mainly focuses on expanding access to healthcare, and government-provided health care and socialized medicine involve the government taking a larger role in the provision and financing of healthcare services, rather than introducing market-based incentives.

Question 16

In most circumstances,employees pay taxes on the value of health insurance their employers provide them.

Accepted Answer

In the United States, the value of health insurance provided by employers is generally not considered taxable income for employees, meaning employees do not pay taxes on this benefit.

Question 17

About ________ of research on new medicines is carried out in the United States.

Accepted Answer

According to the Pharmaceutical Research and Manufacturers of America, two-thirds of research on new medicines is carried out in the United States.

Question 18

Economists who support market-based reforms for health care believe that increased competition among providers of health care would

Accepted Answer

Market-based reforms that increase competition among providers of health care would lead to decreased costs due to providers lowering prices to attract more customers. This increased competition would also lead to increased economic efficiency as providers would be incentivized to improve their services and reduce waste in order to stay competitive.

Question 19

Refer to the Article Summary.The article discusses the rising administrative costs of health care.Even if private insurance companies were more efficient and brought administrative costs down,consumers would ________ the full cost of medical treatment.This would result in the market equilibrium price and quantity of medical services being ________ than the efficient equilibrium price and quantity.

Accepted Answer

The answer of Refer to the Article Summary.The article discusses...

Question 20

Under the Patient Protection and Affordable Care Act (ACA),every company with more than 200 employees must offer health insurance to its employees and must automatically enroll them in the plan.

Accepted Answer

Under the ACA, employers with more than 200 full-time employees are required to automatically enroll new full-time employees in one of the employer’s health benefits plans, subject to any waiting period authorized by law, and to continue the enrollment of current employees.

Quiz 5: The Economics of Health Care