Question 1

Individuals are rationally ignorant about the wealth implications of government activities because the cost of acquiring such information is high and the private benefit is low.

Accepted Answer

Rational ignorance occurs when the cost of acquiring information outweighs the perceived benefits, leading individuals to remain uninformed about certain topics, such as government activities affecting wealth.

Question 2

The government can promote efficiency and equity in which of the following manners?&#10;A) Providing public goods&#10;B) Easing regulations&#10;C) Promoting externalities&#10;D) Enforcing antitrust laws&#10;E)Levying taxes

Accepted Answer

A, D, E

Question 3

Which piece of legislation prohibits independent physicians from discussing their pricing policies to prevent monopolistic practices such as price fixing?&#10;A) Affordable Care Act&#10;B) Sherman Antitrust Act&#10;C) Health Insurance Portability and Accountability Act&#10;D) Medicare Improvement for Patients and Providers Act

Accepted Answer

The Sherman Antitrust Act prohibits independent physicians from discussing their pricing policies to prevent monopolistic practices such as price fixing.

Question 4

Which of the following programs are generally funded by mandatory contributions through some form of taxation?&#10;A) Social insurance&#10;B) Public insurance&#10;C) Group insurance&#10;D) Private insurance

Accepted Answer

Social insurance programs are generally funded by mandatory contributions through some form of taxation.

Question 5

One growing concern for the protection of public goods is the regulation of which of the following?&#10;A) Vaccinations&#10;B) Experimental medications&#10;C) Health information technology&#10;D) Durable medical equipment

Accepted Answer

Health information technology is a growing concern for the protection of public goods because it can be used to collect and share sensitive personal information. This information can be used to track people's movements, monitor their health, and even predict their behavior. As a result, it is important to regulate the use of health information technology to protect people's privacy and security.

Question 6

Another major issue in data security that requires government oversight is the use of which of the following in the storage of medical records?&#10;A) Wireless technology&#10;B) Cloud computing&#10;C) Internet usage&#10;D) Data encryption

Accepted Answer

Cloud computing is a major issue in data security for storing medical records, as it involves storing sensitive data on remote servers, which requires government oversight to ensure data protection and privacy compliance.

Question 7

Which theories describe the motivation behind government intervention in the healthcare market?&#10;A) Public interest group theory&#10;B) Private interest group theory&#10;C) Special interest group theory&#10;D) Foreign interest group theory

Accepted Answer

The answer of Which theories describe the motivation behind government...

Question 8

The special interest theory states that the government intervenes in the best interests of society to promote efficiency and equity in the market.

Accepted Answer

The special interest theory suggests that government intervention is often influenced by specific interest groups seeking to benefit themselves, rather than promoting overall societal efficiency and equity.

Question 9

The special interest theory states that the political venue can be treated like any private market for goods and services so that amounts and types of legislation are determined by supply and demand for such legislation.

Accepted Answer

The special interest theory suggests that political decisions and legislation are influenced by the supply and demand dynamics similar to a market, where interest groups "buy" favorable legislation through lobbying and political contributions.

Question 10

Economists, as well as courts dealing with antitrust cases, often use which concept to measure whether a firm has monopoly power in supplying a good or service in the given market?&#10;A) Cross-price elasticity of demand&#10;B) Cross-price elasticity of supply&#10;C) Vertical price elasticity of demand&#10;D) Vertical price elasticity of supply

Accepted Answer

Cross-price elasticity of demand is used to measure how the quantity demanded of one good changes in response to a price change of another good, which can indicate the level of competition and potential monopoly power in a market.

Deck 5: The Role of Government