Question 1

The __________ the elasticity of demand for medical care,the __________ the extent of over consumption of medical treatment due to insurance.

Accepted Answer

C

Question 2

In general,the optimal amount of medical care to receive is

Accepted Answer

The optimal amount of medical care to receive is that quantity for which the marginal costs of the care equal the marginal benefits. This means that the individual should continue to seek medical care as long as the additional benefit of each unit of care is greater than the additional cost. If the marginal cost of the care exceeds the marginal benefit, then it is not optimal to receive any further care. This approach ensures that the individual receives the appropriate amount of care and does not overspend on unnecessary or ineffective treatments.

Question 3

The amount of waste caused by full insurance coverage depends on

Accepted Answer

The amount of waste caused by full insurance coverage is influenced by the price elasticity of demand for medical services, as it determines how much more medical services are consumed when they are fully covered by insurance.

Question 4

To reduce the social loss due to first-dollar insurance coverage of the medical treatment,

Accepted Answer

When consumers are required to bear some of the marginal cost, they are more likely to make informed decisions about the necessity of medical treatment, leading to a reduction in unnecessary procedures that increase social loss. This helps to control healthcare costs and reduces the social loss due to overuse of medical services. Therefore, the best choice is D.

Question 5

A great deal of medical expenditure inflation,from 4% in 1940 to 14% today,has to do with

Accepted Answer

The emergence of health insurance has led to an increase in medical expenditure inflation because people with insurance tend to use more medical services, and insurance companies negotiate higher prices for medical procedures and drugs. This has contributed significantly to the rise in healthcare costs.

Question 6

Medical insurance covering routine medical care became common

Accepted Answer

Medical insurance covering routine medical care became common after World War II, when employment-based health insurance became a standard benefit offered by employers to attract and retain workers.

Question 7

Under a first-dollar medical insurance plan,the marginal cost of treating a covered illness is

Accepted Answer

Under a first-dollar medical insurance plan, the insurance company pays for all medical expenses without imposing any deductible or copayment on the insured. Therefore, the marginal cost of treating a covered illness under this plan is zero.

Question 8

According to the textbook,the Manning study suggests that a large share of the inflation in medical expenditures is caused by

Accepted Answer

The Manning study suggests that first-dollar medical insurance, which means that the insurance will cover all medical expenses without requiring any co-payments or deductibles from the patient, is a major cause of the inflation in medical expenditures. Patients with first-dollar insurance have little or no incentive to consider the cost of their medical treatments, and doctors may also be more likely to prescribe expensive treatments if they know that the patient's insurance will cover the cost. This results in overutilization of medical services and higher overall medical expenditures.

Question 9

According to the text,the only sensible criterion for allocating scarce health care resources is

Accepted Answer

The answer of According to the text,the only sensible criterion...

Question 10

Insurance that pays for all expenses generated by the insured's activity is known as

Accepted Answer

First-dollar insurance coverage refers to insurance that pays for all expenses from the first dollar, without requiring a deductible or other out-of-pocket expenses from the insured. This is in contrast to last-dollar coverage, which only covers expenses that exceed a certain threshold, and total-dollar coverage, which places a cap on the total amount of coverage available. Cradle to grave insurance coverage is a broader term that refers to insurance that covers all of an individual's needs from birth to death, including health, life, disability, and long-term care insurance.

Question 11

If the marginal cost of treating an illness is zero,the optimal amount of treatment to receive is the amount

Accepted Answer

When the marginal cost is zero, the optimal amount of treatment is where the marginal benefit is zero, as this maximizes total benefit without incurring additional costs.

Question 12

Prior to World War II,most consumers in the United States

Accepted Answer

The answer of Prior to World War II,most consumers in...

Question 13

To the patient,the marginal cost of medical care is zero

Accepted Answer

Under first-dollar insurance coverage, the patient does not have to pay anything out of pocket for medical care, as the insurance covers all costs from the first dollar. Therefore, to the patient, the marginal cost of medical care is zero, leading to overuse or misuse of healthcare resources. In other healthcare payment models like HMOs and fee-for-service, the patient may have to pay some amount out of pocket, which increases the marginal cost of medical care. Hence, the patient's marginal cost is not always zero, and the correct option is B.

Question 14

According to the textbook,the percentage of gross domestic product devoted to healthcare between the years 1940 and 2000

Accepted Answer

The percentage of gross domestic product devoted to healthcare increased sharply from 4% to 14% between the years 1940 and 2000, according to the textbook.

Question 15

First-dollar insurance coverage means that

Accepted Answer

First-dollar insurance coverage means that all of the insured's expenses are covered.

Question 16

The effect of widespread insurance covering routine medical care is to reduce the

Accepted Answer

Insurance covering routine medical care reduces the marginal cost to the insured because they pay less out-of-pocket for each additional unit of care, making it cheaper for them to access routine medical services.

Question 17

The growth of medical insurance in general and first-dollar coverage specifically has reduced the marginal cost of treatment paid by the consumer.Therefore,the current level of medical treatment in the United States is

Accepted Answer

First-dollar coverage reduces the out-of-pocket cost for consumers, leading to overconsumption of medical services, which results in a level of treatment greater than the efficient level.

Question 18

One implication of the results of the Manning study is that the demand for non-catastrophic health care is

Accepted Answer

The Manning study discovered that the demand for non-catastrophic healthcare is somewhat elastic, meaning that changes in price can influence consumer behavior. This is in line with standard economic theory, which suggests that there is a relationship between price and demand for most goods and services. The other options are not supported by the study's findings.

Question 19

According to the textbook,Manning and his colleagues found that people with $1000-deductible policies spent _____ on health care relative to people with first-dollar coverage.

Accepted Answer

Manning and his colleagues found that people with $1000-deductible policies spent less on health care compared to those with first-dollar coverage, as higher deductibles generally lead to reduced health care spending due to increased out-of-pocket costs.

Question 20

When Dale visits the doctor,Dale does not pay for either the visit or any tests the doctor may order.Dale must therefore

Accepted Answer

First-dollar medical insurance covers all medical expenses without requiring the insured to pay a deductible or co-payment, meaning Dale wouldn't pay for visits or tests.

Quiz 13: The Environment, Health, and Safety

The the elasticity of demand for medical care,the the extent of over consumption of medical treatment due to insurance.