Question 1

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

Accepted Answer

Under first-dollar insurance coverage, the patient is not required to pay a deductible or copay for medical services. As a result, the marginal cost (or additional cost) of seeking medical care is effectively zero for the patient. However, in other healthcare payment models such as HMOs or fee-for-service plans, patients may be required to pay deductibles, copays, or coinsurance, which increases the marginal cost of medical care. Therefore, options A, C, and D are incorrect.

Question 2

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

C

Question 3

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

Accepted Answer

By making the consumer bear some of the marginal cost, they will have an incentive to consider the necessity of the medical treatment before seeking it. This will reduce unnecessary and costly treatments, thereby reducing the social loss.

Question 4

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 provides coverage for all medical expenses from the first dollar spent, leads to higher medical spending and contributes to inflation in medical expenditures. This is because individuals with such insurance have less incentive to control their medical spending, as they do not face out-of-pocket costs for medical services.

Question 5

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

Accepted Answer

The answer of The __________ the elasticity of demand for...

Question 6

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% in 1940 to 14% in 2000, as per the textbook.

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 policyholder is not responsible for any out-of-pocket expenses for covered medical services. As a result, the marginal cost of treating a covered illness is zero, meaning there is no additional cost for the policyholder for each additional treatment they may need for the same illness.

Question 8

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

Accepted Answer

The Manning study found that individuals were responsive to changes in the price of healthcare services for non-catastrophic events, indicating that the demand for this type of healthcare is somewhat elastic. This suggests that standard economic theory can be applied to the demand for non-catastrophic healthcare services.

Question 9

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 10

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 11

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

Accepted Answer

The answer of The effect of widespread insurance covering routine...

Question 12

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 13

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

The answer of According to the textbook,Manning and his colleagues...

Question 14

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

Accepted Answer

First-dollar insurance coverage is a type of insurance policy in which the insurer pays for all expenses incurred by the insured without any deductible or co-payment. In other words, the coverage starts from the first dollar and covers all expenses up to the policy limit.

Question 15

The amount of waste caused by full insurance coverage depends on

Accepted Answer

The amount of waste caused by full insurance coverage depends on the price elasticity of demand for medical service. When the price elasticity of demand is low, individuals are not as sensitive to the cost of medical services and are more likely to use them even when they are not necessary. As a result, full insurance coverage can lead to overuse and waste of medical resources. On the other hand, when the price elasticity of demand is high, individuals are more sensitive to the cost of medical services and are less likely to overuse them.

Question 16

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

Accepted Answer

The answer of If the marginal cost of treating an...

Question 17

Medical insurance covering routine medical care became common

Accepted Answer

Medical insurance covering routine medical care began to be offered by employers after World War II as part of employee benefits packages. This was due to the increasing demand for healthcare services and the rising cost of medical care.

Question 18

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

The growth of medical insurance and first-dollar coverage has reduced the marginal cost of treatment paid by the consumer so much that they are likely to overuse medical treatment, leading to a level of medical treatment greater than the efficient level.

Question 19

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 ensures that the additional benefit gained from receiving additional medical care is equal to the additional cost incurred. It is not optimal to receive as much medical care as one can afford as this may result in unnecessary treatments and expenses. It is also not optimal to receive only enough to get well if there are additional benefits that can be gained from further medical care. The total costs and total benefits are not sufficient measures as they do not take into account the additional benefits and costs of each additional unit of medical care received.

Question 20

First-dollar insurance coverage means that

Accepted Answer

First-dollar insurance coverage means that all of the insured's expenses are covered without any deductible or out-of-pocket cost.

Quiz 13: The Environment, Health, and Safety