Health Economy course Questions

Health Economy course Questions
Answer the below questions(MCQ) with explanations:
1.Refers to exploitation of asymmetric information to increase demand for physician services.
a. Physician inflation rate
b. Supplier-induced demand
c. Fee-for-service
d. Market equilibrium
e. None of the above
2.Which of the following reasons might explain why expenditures on physician services have increased?
a. Increased utilization
b. Increased practice costs
c. Increased physician incomes
d. All of the above
e. None of the above
3.Which of the following payment mechanisms provides the greatest incentive to over utilize medical care?
a. Fee-for-service
b. Fixed Salary
c. Capitation
d. Pay-for-performance
e. Price controls
4.Over the past thirty years, the absolute number of active primary care physicians in the united states has _______ while the proportion of active primary care physicians has _______.
a. decreased; decreased
b. decreased; increased
c. increased; remained stable
d. increased; increased
e. increased; decreased
5.Which of the following exemplifies the principal-agent theory within medical care?
a. The doctor-patient relationship
b. The doctor-payer relationship
c. The patient-payer relationship
d. Both a and c
e. All of the above
6.The _______ suggests that per capita variations in the use of medical care are due to variations in physician preference for particular medical procedures.
a. physician practice hypothesis
b. supplier-induced demand hypothesis
c. enthusiasm hypothesis
d. principal-agent hypothesis
e. small area variation hypothesis
7.The ———— suggests that per capita variations in the use of medical care are to variations in clinical opinions regarding the appropriate amount and type of medical care.

a. physician practice hypothesis.
b. supplier-induced demand hypothesis.
c. enthusiasm hypothesis.
d. principle-agent hypothesis.
e. small area variation hypothesis.
8.————— relates to productivity or quality improvement observed over time irrespective of the quantity produced.

a. Sunk costs.
b. System affiliation.
c. Scale economies.
d. Scope economies.
e. Learning-by-watching.
9.Assume that there are 5 equally sized hospitals in a market area.If two of these hospitals decide to merge,what will be the increase in the Herfindahl-Hirschman index?

a. 2000.
b. 800.
c. 1600.
d. 2800.
e. 400.
10.Which of the following hospital product characteristics has been shown to strongly affect consumer choice?

a. Staff.
b. Physical facilities .
c. Experience.
d. All of the above.
11.Which of the following accounts for largest portion of hospital expenditures in the United States?

a. Private insurance.
b. Out-of-pocket.
c. Government.
d. Charity care.
e. Other.
12.According to the ——————,new technology is most likely to be adopted by research and teaching hospitals first.

a. quantity maximization model.
b. quality maximization model.
c. managerial expense prefernce model.
d. quality quantitymaximization model.
e. utility maximization model.

13.Demand for hospital services in the U.S. is considered to be —————-.

a. inelastic.
b. elastic.
c. unit elastic.
d. income elastic.
e. None of the above.

14.Which of the following reasons might serve as a barrier to entry within the hospital services industry?

a. Scale economies.
b. Standardized product.
c. Certificate of need.
d. Both a and c.
e. All of the above.
15.————————- occurs when change to prices charged to payers changes as a compensating response to changes in administered prices of a different payer.

a.Scale economies .
b.Sunk cost.
c. Cost-shifting.
d.Moral hazard.
e.Hospital services price inflation.

16. Which of the following best explains why there is little evidence of cost differences between hospital ownership-types in the United States?

a. Certificates of need.
b. Consolidations.
c. Increasing hospital occupancy rates.
d. Physicians seeking to maximize their incomes.
e. All of the above.

17. Which of the following methods has been used by third-party payers in the U.S to control pharmaceutical cost?

a. Formularies.
b. Drug utilisation review.
c. Generic substitution.
d. Both b and c .
e. All of the above .

18.While pharmaceutical manufacturers compete in a ——————- concentrated industry than benefit management companies ,mergers between the two help to costs.

a. less ; increase.
b. less ; decrease.
c. more ; increase.
d. more; decrease.
e. similarly ; decrease.
19.In the U.S ,patents award pharmaceutical firms the sole right to produce a product for
————years and ————the financial incentive for firms to develop new drugs.

a. 25; increase.
b. 18; decrease.
c. 20; increase.
d. 15; increase.
e. 25; decrease.
20.Which of the following serves as a barrier to entry in the pharmaceutical industry?

a. Government patents.
b. Certificates of need.
c. Brand-loyalty advantage.
d. Both a and c.
e. All of the above.

21.The U.S Food and Drug Administration (FDA)tends to focus more on reducing ————-errors since the victims are ————- identifiable than those from —————errors.

a. type 1; less; type 2.
b. type 2; more;type 1.
c. type 2;less;type 1.
d. type 1; more;type 2.
e. Non of the above.
22.Entrance of generic drugs into the market tends to ————- the price of the brand name drug since the remaining consumers of the brand name drug are typically—————price-sensitive.

a. increase; more.
b. decrease; more.
c. increase; less.
d. not affect; equally.
e. decrease; less.

23.Which of the following would explain why large firms possess greater incentive to engage in research and development of new drugs than small firms do

a. Resource capability.
b. Risk absorption .
c. Research economies.
d. All of the above.
e. None of the above.

24.advertising is supported by evidence showing that ————— detailed advertising of older products tends to be targeted at younger physicians.

a. Informative; more.
b. Persuasive; less.
c. Informative;less.
d. Persuasive;more.
e. both a and d .
25.Which of the following represents an opportunity cost?

a. Increase in medical technology.
b. Reduction in fees for Medicare patients.
c. Additional spending on public health initiatives.
d. Increase enrollments at medical schools.
e. Forgone geriatric care to provide additional maternity services.

26.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
27.—————————–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
28. 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?
29. the concept of ———————– helps explain why some people choose not to visit their primary care physician every day.
a. inseparability
b. human capital
c. diminishing marginal utility.
d. process quality.
e. absolute income hypothesis
30. which of the following is not a characteristic of medical care that distinguishes it from other goods?
a. investment.
b. inventory.
c. intangibility.
d. Inconsistency
e. inseparability
31. which of the following is included in the health production function?
a. age
b. state of medical technology
c. gender
d. income
e. All of the above
32. ————————————are typically the primary source of funding for medical care insurance provided by a government agency.
a. taxes
b. premiums
c. copayments
d. out-of-pocket fees
e. none of the above
33. which of the following countries provides universal health insurance coverage?
a. United States
b. Germany
c. Switzerland
d. United Kingdom
e. Canada
34. Germany’s health care system can be best described as ——————————-.
a. national health insurance
b. socialized health insurance
c. managed competition
d. public contracting
e. pluralistic
35. switzerland’s health care system ca be best described as _____________________.
a. national health insurance
b. socialized health insurance
c. managed competition
d. public contracting
e. pluralistic
36. the two major types of public health insurance in the U.S are——————————.
a. blue cross and blue shield
b. blue shield and medicaid
c. blue cross and medicare
d. medicare and blue shield
e. medicare and Medicaid
37. medical care providers in the U.S are reimbursed through the use of
a. fixed payment systems
b. variable payment systems
c. out-of-pocket fees
d. all of the above
e. both a and c
38. insurance _______________________ the price for medical care, thereby————the demand for it.
a. increase, decrease
b. decrease, decrease
c. increase, increase
d. decrease, increase
e. none of the above
39. A—————- represents afixed amount paid by the consumer that is independent of the market price or actual costs of medical care.
a. deductible
b. loading charge
c. coinsurance rate
d. claim
e. copayment
40. of the following might occur after acquiring health insurance due to moral hazard?
a. a consumer visits a doctor more frequently
b. a consumer washes his / her hands more frequently.
c. a consumer eats healthier
d. all of the above
e. none of the above
41. A positive cross-price elasticity estimate between in-patient and out-patient services at a hospital would implay that two are—————.
a. normal goods
b. inferior goods
c. compliments
d. substitutes
e. unrelated
42. if sarah has an income of 550,000 when healthy, and faces a probability of 0.15 of losing $10,000 of this due to an illness, what is her expected income?
a. $17,500
b. $40,000
c. $48,500
d. $44,000
e. $16,000
43. An individual who is ———————- would not choose to purchase health insurance.
a. risk-averse
b. self-employed
c. unemployed
d. risk-neutral
e. risk-loving
44. Reduced coinsurance rates are likely to ———————moral hazards costs and —————the risk exposure of the consumer
a. increase, decrease
b. decrease, decrease
c. increase, increase
d. decrease, increase
e. none of the above
45. insurance premiums determined by a ——————are based on the risk characteristics of the entire membership.
a. loading charge
b. experience rating
c. staff model
d. group model
e. community rating
46.———————–occur when the cost of producing a medical service decrease as the quality produced increase.
a. economics of scale
b. economics of scope
c. diseconomies of scale
d. diseconomies of scope
e.none of the above

47. Suppose a government decides to subsidize flu vaccinations in an attempt to correct a market failure. Without this government interventions, the flu vaccination would most likely be ———————due to the presence of ————.
a. over- consumed, negative externalities
b. under-consumed, positive externalities
c. over-consumed, positive externalities
d. under-consumed, negative externalities
e. none of the above
48. —————-is the principal catalyst for the provision of government intervention in the market for health insurance
a. uncertainty
b. population growth
c. disease prevalence
d. imperfect information
e. health expenditure growth
49.——————————— is the situation where insured individuals alter their behavior because they are no longer financially responsible for the full cost of their behavior.
a. moral hazard
b. asymmetric information
c. rationality
d. scale economies
e. adverse selection

50. which of the following reasons might explain why health insurance purchased as a group might be less costly than coverage purchased individually?
a. greater bargaining power
b. risk spreading over a larger number of people
c. lower marketing costs for the provider
d. Both a and b
e. All of the above