Question 1

Since 1975, the uninsurance rate in the U.S. has increased.

Accepted Answer

The uninsurance rate in the U.S. has increased since 1975, as stated in the given question.

Question 2

Opportunity costs only occur when there is government involvement in markets such as health care.

Accepted Answer

Opportunity costs occur in every decision-making process, regardless of government involvement. It refers to the cost of foregone alternatives when making a choice. Therefore, opportunity costs also exist in free-market systems without government intervention in healthcare.

Question 3

Which of the following is not a basic question that must be answered as a result of scarcity?
A) Who should decide the amount of money spent on medical goods and services?
B) Who should receive the medical goods and services that are produced?
C) What mix of nonmedical and medical goods and services should be produced in the macroeconomy?
D) What specific health care resources should be used to produce the chosen medical goods and services?
E) What mix of medical goods and services should be produced in the health economy?

Accepted Answer

The question of who should decide the amount of money spent on medical goods and services is more about governance and policy-making rather than a direct result of scarcity, which typically concerns what to produce, how to produce, and for whom to produce.

Question 4

Which of the following best describes allocative efficiency?
A) Producing a medical service at the lowest possible cost.
B) Constructing a new medical facility to exactly offset a market shortage of such services.
C) Increasing the amount of hospital beds available such that each person in the population served has a bed allocated to him/her.
D) None of the above.
E) More than one of the above statements is true.

Accepted Answer

Allocative efficiency refers to the optimal allocation of resources to produce the desired outcome. Constructing a new medical facility to exactly offset a market shortage of such services best describes this concept. Option A refers to productive efficiency, which is producing a good/service at the lowest possible cost, and Option C is not allocatively efficient as it does not consider the actual demand for hospital beds. Option D is incorrect as there is at least one correct option.

Question 5

Which of the following best describes productive efficiency?
A) Producing a medical service at the lowest possible cost.
B) Constructing a new medical facility to exactly offset a market shortage of such services.
C) Increasing the amount of hospital beds available such that each person in the population served has a bed allocated to him/her.
D) None of the above.
E) More than one of the above statements is true.

Accepted Answer

Productive efficiency is the production of goods or services at the lowest possible cost. Option A accurately captures this definition. Option B refers to achieving allocative efficiency by balancing supply and demand, and option C refers to achieving technical efficiency by using resources fully, but neither accurately describes productive efficiency.

Question 6

The U.S. market system is best described as a _______.
A) Perfect egalitarian system.
B) Pure market system.
C) Dictatorship.
D) Mixed distribution system.
E) More than one of the above statements is true.

Accepted Answer

The U.S. market system is a mixed distribution system, meaning that it is controlled by both the government and the private sector. The government regulates certain aspects of the economy, such as antitrust laws and enforcing contracts, while the private sector operates and makes decisions based on supply and demand in the market. While there is some level of economic freedom, it is not a pure market system because there are regulations and government intervention.

Question 7

_______ help explain the law of increasing opportunity costs.
A) Differing consumer preferences
B) The characteristics of a pure market system
C) Advancements in technology
D) Imperfect substitutability of resources
E) Decreases in the availability of natural resources

Accepted Answer

The law of increasing opportunity costs states that as more units of a good are produced, the opportunity cost of producing each additional unit increases. This is due to the fact that resources are not perfectly substitutable, and as more resources are devoted to the production of a particular good, the opportunity cost of using those resources for alternative purposes increases. Therefore, the best choice is D, as it directly relates to the principle behind the law of increasing opportunity costs.

Question 8

Which of the following accounts for the greatest amount of health care spending?
A) Public health
B) Physician services
C) Prescription drugs
D) Nursing home care
E) Hospital services

Accepted Answer

Hospital services account for the greatest amount of health care spending, accounting for approximately one-third of total health care expenditures. This includes inpatient and outpatient care, emergency department visits, and other medical procedures performed within a hospital setting.

Question 9

Physicians are a scarce resource in health care markets.

Accepted Answer

There is a shortage of physicians in many health care markets around the world. This is partly due to factors such as population growth, aging populations, and increasing demand for health care services. As a result, many patients may have difficulty accessing timely and high-quality medical care, particularly in areas where there are relatively few physicians available.

Question 10

All points along the production possibilities frontier maximize equity.

Accepted Answer

The production possibilities frontier represents the tradeoff between producing different goods and services. While it ensures efficiency in production, it does not necessarily ensure equity as the distribution of goods and services may not be equal or fair. Maximizing equity would require additional considerations beyond the production possibilities frontier, such as redistribution policies or prioritizing certain goods and services for those in need.

Question 11

_______ is the largest source of health care funds in the U.S.
A) Out-of-pocket
B) Medicaid
C) Medicare
D) Private health insurance
E) Workers' compensation

Accepted Answer

Private health insurance is the largest source of health care funds in the U.S., covering a significant portion of the population and accounting for a substantial part of the overall health expenditure.

Question 12

Any point _______ the production possibilities frontier is efficient and attainable.
A) inside of
B) along
C) outside of
D) both a and b are correct
E) both a and c are correct

Accepted Answer

Points along the production possibilities frontier represent all possible combinations of two goods that can be produced given the available resources and technology. Any point inside the frontier is inefficient because resources are not fully used, while any point outside the frontier is unattainable because it requires more resources than what is currently available. Therefore, the only point that is both efficient and attainable is along the production possibilities frontier.

Question 13

Among developed countries, the U.S. has the lowest infant mortality rate.

Accepted Answer

This statement is false. According to 2020 data from the Organisation for Economic Co-operation and Development (OECD), the United States has a higher infant mortality rate than other developed countries such as Japan, Sweden, and Finland.

Question 14

Which of the following represents an opportunity cost?
A) Increases in medical technology.
B) Reduction in fees for Medicare patients.
C) Additional spending on public health initiatives.
D) Increased enrollments at medical schools.
E) Forgone geriatric care to provide additional maternity services.

Accepted Answer

Opportunity cost refers to the benefits that are foregone when one course of action is taken over another. In this case, forgoing geriatric care to provide additional maternity services represents an opportunity cost because the resources that could have been allocated to geriatric care are instead being used for maternity services.

Question 15

The components of the three-legged stool of medical care are _______.
A) costs, access, efficiency
B) costs, equity, access
C) access, equity, efficiency
D) efficiency, costs, quality
E) costs, access, quality

Accepted Answer

The three-legged stool of medical care consists of costs, access, and quality. While equity and efficiency are important considerations, they are not traditionally included in this framework. Therefore, the best answer choice is E, which includes the correct components of the stool.

Quiz 1: Introduction

Since 1975, the uninsurance rate in the U.S. has increased.

Opportunity costs only occur when there is government involvement in markets such as health care.

Which of the following is not a basic question that must be answered as a result of scarcity?

Which of the following best describes allocative efficiency?

Which of the following best describes productive efficiency?

The U.S. market system is best described as a _______.

_______ help explain the law of increasing opportunity costs.

Which of the following accounts for the greatest amount of health care spending?

Physicians are a scarce resource in health care markets.

All points along the production possibilities frontier maximize equity.

_______ is the largest source of health care funds in the U.S.

Any point _______ the production possibilities frontier is efficient and attainable.

Among developed countries, the U.S. has the lowest infant mortality rate.

Which of the following represents an opportunity cost?

The components of the three-legged stool of medical care are _______.