Deck 13: Value Judgements and Economic Evaluation

Question 1

The two welfare effects of insurance are

A) The welfare gain from shifting the risk and the welfare gain from consuming beyond the optimal point when the individual is ill
B) The welfare gain from shifting the risk and the welfare loss from consuming beyond the optimal point when the individual is ill
C) The welfare loss from shifting the risk and the welfare gain from consuming beyond the optimal point when the individual is ill
D) The welfare loss from shifting the risk and the welfare loss from consuming beyond the optimal point when the individual is ill

Answer 1

B

Question 2

The three types of distributional equity are:

A) Vertical, intergenerational, and horizontal
B) Vertical, social, and intergenerational
C) Horizontal, social, and intergenerational
D) Vertical, horizontal, and social

Answer 2

A

Question 3

To achieve this type of efficient, demand must be at an appropriate level, the supply of services must be adequate, the level of quality must be appropriate, and produced at a low cost.

A) Technical efficiency
B) Allocative efficiency
C) Social efficiency
D) Economic efficiency

Answer 3

D

Question 4

An externality occurs when a third party is affected by the two parties directly involved in a transaction or exchange but does not have a direct way of impacting the outcome of the

Question 5

Diminishing marginal value means the more of any good or service the individual has, the less successive units of the good or service will be worth to them..

Question 6

Allocative efficiency implies that, given production conditions and input prices, the lowest cost combination of inputs is used at any output level.

Question 7

Marginal cost is the amount that would have to be paid to the resources to induce them not to produce something else of value to consumers.

Question 8

If marginal cost is greater than the marginal social value, then output should be increased.

Question 9

Social value is made up of all individuals' external values for a specific good or service.

Question 10

Free ride refers to a donor gaining benefits from others' donations while giving less.

Question 11

The extra-welfarist position is concerned with how health is distributed among all members of society.

Question 12

Will a freely competitive market without philanthropy yield a socially optimal output when there are consumption externalities? Discuss your answer.

Question 13

List and discuss five goals of health policy.

Question 14

What is necessary for moral hazard to occur and what are its implications?