Ashworth HE360 Exam 7 2018

Part 1 of 2 – 95.0/
100.0 Points

Question 1 of 40 5.0/
5.0 Points

Suppose, in the figure above that the rate regulator imposes
price I. In response, the monopolist will:

A. lower price and increase quantity, leading to increased
consumer surplus.

B. increase price and decrease quantity, leading to
decreased consumer surplus.

C. keep quantity the same and accept reduced profits.

D. cease producing the good.

Question 2 of 40 5.0/
5.0 Points

The Hawaii’s Keiki (Child) Care insurance program was halted
because:

A. the program apparently crowded out other insurance
coverage.

B. the program turned out a large and lucrative revenue
flow.

C. there was extensive fraud in the program.

D. there were not personnel available to run the program.

Question 3 of 40 5.0/
5.0 Points

Prospective payment generally reimburses hospitals at a/an:
?

A. sliding rate based on the hospital’s profitability.

B. increasing rate depending on the length of stay.

C. decreasing rate depending on the length of stay.

D. fixed rate.

Question 4 of 40 5.0/
5.0 Points

Under the Patient Protection and Affordable Care Act, passed
in 2010:

A. all residents will get health insurance by 2013.

B. all residents will get health insurance by 2016.

C. about 32 million of the 50 million uninsured (in
2010-2011) will get health insurance by 2020.

D. There is no firm timetable for universal health
insurance.

Question 5 of 40 5.0/
5.0 Points

Medicaid is particularly attractive to the states because:

A. it provides additional funds for the purchase of services
for the poor.

B. it effectively raises the price per unit of medical care
to the poor.

C. it increases the size of state governments.

D. the federal government pays for and provides specific
guidelines as to how the money is allocated.

Question 6 of 40 5.0/
5.0 Points

Medicare Part D provides improved coverage focusing on:

A. nursing home care.

B. pharmaceutical expenditures.

C. chronic illness.

D. managed care.

Question 7 of 40 0.0/
5.0 Points

In the figure above, the welfare loss of monopoly is
triangle: ?

A. ABC.

B. CDE.

C. EFG.

D. AIJ.

Question 8 of 40 5.0/
5.0 Points

Analysts believe that Medicare’s share of GDP will rise
because:

A. of increased numbers of beneficiaries.

B. of decreased costs per beneficiary.

C. of fraud in the Medicare system.

D. Medicaid is being phased out.

Question 9 of 40 5.0/
5.0 Points

Under Shleifer’s yardstick pricing scheme:

A. hospitals achieve a Nash equilibrium because their own
costs do not enter the optimization process.

B. hospitals will only participate if they will not lose profits.

C. the hospitals have an incentive to overstate their costs.

D. hospitals receive a qualitative equilibrium related to
their costs.

Question 10 of 40 5.0/
5.0 Points

Davis and Reynolds found that public assistance related to
Medicare and Medicaid __________ health care utilization for recipients
relative to those who did not receive public assistance.

A. increased

B. decreased

C. had no impact on

D. accelerated

Question 11 of 40 5.0/
5.0 Points

Analysts believe that in the economic downturn of 2000-2003:

A. the number of uninsured did not change much because
people bought more private insurance.

B. the number of uninsured did not rise much because
employers provided more health insurance.

C. Medicaid take-up provided insurance for many who would
have otherwise gone without insurance.

D. many households voluntarily reduced their health
insurance.

Question 12 of 40 5.0/
5.0 Points

In the figure above, box BCDH represents: ?

A. a revenue transfer from consumers to producers under
monopoly.

B. part of the welfare loss of monopoly.

C. a result of rate regulation.

D. a revenue rebate from producers to consumers.

Question 13 of 40 5.0/
5.0 Points

Within the past 20 years Medicaid has increasingly become
the source of payment for: ?

A. pharmaceuticals.

B. the elderly.

C. long-term nursing home care.

D. industry regulators.

Question 14 of 40 5.0/
5.0 Points

The Medicare Part D “doughnut hole” means that: ?

A. diet plans are not covered.

B. at a specified level of expenditures, the consumers’
incremental share jumps to near 100 percent.

C. the costs will put the system in financial jeopardy.

D. patients who do not maintain a healthy weight will be
responsible for copayments.

Question 15 of 40 5.0/
5.0 Points

Analysts expect the total number of Medicare beneficiaries
to rise between the years 2010 and 2040, by approximately __________ million
people.

A. 14

B. 21

C. 37

D. 40

Question 16 of 40 5.0/
5.0 Points

Referring to the diagram above, suppose that UA and UB
represent the preferences of Persons A and B for health insurance and all other
goods. If I0 represents the minimum coverage available: ?

A. both will buy the minimum insurance.

B. Person A will buy more than I0 and Person B will be
uninsured.

C. Person A and Person B will both buy health insurance.

D. Person A will buy the minimum insurance and Person B will
be uninsured.

Question 17 of 40 5.0/
5.0 Points

In evaluating mergers, regulators must often evaluate the
trade-off between __________ and __________. ?

A. economies of scale; monopoly power

B. economies of scope; monopolistic competition

C. technological change; market competition

D. economies of scale; economies of scope

Question 18 of 40 5.0/
5.0 Points

Referring to the figure above, increased insurance coverage
(more recipients and more generous coinsurance) leads to a shift from
__________ in health expenditures.

A. point A to point B and a decrease

B. point A to point B and an increase

C. point B to point C and an increase

D. point A to point C, and a decrease

Question 19 of 40 5.0/
5.0 Points

Currie and Gruber have found that Medicaid programs often
lead to improvements in measures of health such as infant mortality rates. They
tend to be expensive, however leading to questions of program viability as
measured by:

A. cost-benefit ratios.

B. economic efficiency.

C. cost-utility analysis.

D. cost-effectiveness.

Question 20 of 40 5.0/
5.0 Points

Refer to the figure above. Under monopolistic pricing the
hospital will produce __________ where __________.

A.

Q1; marginal revenue equals marginal cost

B.

Q1; marginal revenue equals average cost

C.

Q2; prospective cost equals demand price

D.

Q3; demand is satisfied

Part 2 of 2 – 75.0/
100.0 Points

Question 21 of 40 5.0/
5.0 Points

Suppose a worker earns $15 per hour plus health benefits
worth $2 per hour. If the employer withdraws the benefits and offers the worker
$16 per hour the worker will be:

A. better off because $16 is more than $15.

B. as well off because he or she is earning more than
before.

C. worse off because previously he or she was earning $17
including the benefit, but is now only earning $16.

D. better off because previously he or she was earning $16
including the benefit, but is now earning $17.

Question 22 of 40 5.0/
5.0 Points

In the figure above, loosening supplier regulations could
move an equilibrium from point __________ to point __________.

A. B; A

B. C; E

C. E; C

D. E; A

Question 23 of 40 0.0/
5.0 Points

Many of the more industrialized countries have sought to
reform their health care systems by introducing elements of: ?

A. market mechanisms.

B. rationing.

C. price controls.

D. government service provision.

Question 24 of 40 0.0/
5.0 Points

In monopsonistic health care systems, expenditures are lower
because:

A. providers give lower quality care.

B. providers are paid below-market wages.

C. system administrators extract economic rents from the
health care providers.

D. system administrators extract economic rents from the
patients directly through payments.

Question 25 of 40 5.0/
5.0 Points

In the figure above, if the administered price P* in the NHS
were to be raised we might expect:

A. price in the private market to rise.

B. price in the public market to fall.

C. excess demand in the NHS sector to fall.

D. excess demand in the public sector to fall.

Question 26 of 40 5.0/
5.0 Points

In the United States, employer-provided health insurance
distorts the choice between health care and other items because: ?

A. health insurance may lead to over-consumption of health
care due to moral hazard.

B. employer contributions are tax exempt, thus reducing the
price of insurance relative to other goods.

C. employer contributions are taxed, thus increasing the
price of insurance relative to other goods.

D. workers believe that the health insurance is free.

Question 27 of 40 0.0/
5.0 Points

In the figure above, the supply curve for a national health
service is drawn vertically because:

A. demand does not equal supply.

B. quantity supplied is unresponsive to price.

C. price is administered at P.

D. price is determined at P.

Question 28 of 40 5.0/
5.0 Points

Pay for performance (P4P) plans:

A. have proven successful in reducing health expenditures.

B. require detailed performance measures to be successful.

C. have improved the Canadian health care system.

D. will always increase health care quality.

Question 29 of 40 5.0/
5.0 Points

In the figure above, starting at point A, a move to point
B” increases:

A. efficiency only if financed by taxes.

B. efficiency only if paid for by employers.

C. efficiency only if accompanied by technological change.

D. efficiency.

Question 30 of 40 5.0/
5.0 Points

Consider the figure above. Which of the following points
constitute inefficient allocations of the economy’s resources? ?

A.

A

B.

B’

C.

D

D.

E

Question 31 of 40 5.0/
5.0 Points

Total expenditure for universal health insurance would
__________ the true cost because __________.

A. overstate; the uninsured are already receiving
uncompensated care

B. understate; employers would lose money

C. precisely estimate; we have good estimates of health care
costs

D. understate; insurers could not offer this coverage
without a subsidy

Question 32 of 40 5.0/
5.0 Points

In the figure above, starting at point A, if health reform
moves the economy to point __________ it __________ efficiency?

A.

J; increases

B.

B’; increases

C.

B; increases

D.

D; decreases

Question 33 of 40 5.0/
5.0 Points

In the figure above, if mandated insurance benefits increase
marginal costs to MC 2 , the firm will:

A.

pass all of the increased costs along to the consumers in
the form of increased prices.

B.

optimize at point C, passing on part of the cost increases
to the consumers by raising the price from P2 to P1.

C.

take advantage of economies of scale by reducing the price
from P2 to P3.

D.

optimize at point A where MC1 equals demand.

Question 34 of 40 5.0/
5.0 Points

Critics of the U.S. health care system argue that the
Canadian single-payer system has lower administrative costs. Estimates of the
potential cost savings from a Canadian system range from: ?

A. zero – it would provide no savings.

B. $28 to 45 per person.

C. $489 to $752 per person.

D. $1,085 to $1,511 per person.

Question 35 of 40 5.0/
5.0 Points

Under the Patient Protection and Affordable Care Act: ?

A. all U.S. residents will receive health insurance by 2018.

B. all U.S. citizens will receive health insurance by 2018.

C. approximately 32 million of the 50 million uninsured in
2010-2011 will receive health insurance by 2018.

D. the U.S. government will provide health care to all
citizens by 2018.

Question 36 of 40 5.0/
5.0 Points

Gordon developed a typology of health care systems. They
include traditional sickness insurance, national health insurance, __________,
and __________.

A. national health services; mixed systems

B. socialized health insurance; private systems

C. Medicare; Medicaid

D. entitlements; means-tested programs

Question 37 of 40 0.0/
5.0 Points

In the figure above, an increase in demand in the NHS system
will:

A. increase the administered price.

B. increase excess demand in the NHS market.

C. increase demand in the private market.

D. increase demand in the public market.

Question 38 of 40 5.0/
5.0 Points

In monopolistic health care systems, expenditures are higher
because providers:

A. give higher quality care.

B. extract monopoly rents from the payers.

C. offer too many services.

D. increase their quantity of services and give higher
quality care.

Question 39 of 40 5.0/
5.0 Points

Individual insurance mandates require:

A. taxpayers to enroll in government-sponsored insurance.

B. taxpayers to buy insurance from private sellers.

C. all consumers to get insurance, whether from employers,
the private market, or the government.

D. employers to stop offering insurance.

Question 40 of 40 0.0/
5.0 Points

The Chinese health care system has changed since the 1970s
from a:

A. centralized command system to a more privatized system
with smaller subsidies.

B. centralized command system to a national health care
system.

C. national health insurance system to a national health
care system.

D. “mixed” health care system to a centralized command
system.

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