Health Policy and Economics Test Bank
Course Introduction
This course explores the intersection of health policy and economics, focusing on how economic principles and analysis inform the development, implementation, and evaluation of health policies. Students will examine the organization, financing, and delivery of healthcare systems, as well as the role of government and private sectors in shaping health outcomes. Key topics include health insurance markets, cost-effectiveness analysis, healthcare spending, regulation, and global health challenges. Through case studies and real-world examples, the course provides a comprehensive understanding of how economic theory and policy interventions affect the efficiency, equity, and accessibility of healthcare services.
Recommended Textbook
Health Economics 6th Edition by Rexford
E. Santerre
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16 Chapters
240 Verified Questions
240 Flashcards
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Chapter 1: Introduction
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Source URL: https://quizplus.com/quiz/78432
Sample Questions
Q1) Since 1975, the uninsurance rate in the U.S. has increased.
A)True
B)False
Answer: True
Q2) 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
Answer: E
Q3) 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
Answer: E
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Chapter 2: Health and Medical Care: an Economic Perspective
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15 Verified Questions
15 Flashcards
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Sample Questions
Q1) 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
Answer: E
Q2) Which of the following best illustrates the law of diminishing marginal utility?
A) A physician orders additional exams to provide a more accurate diagnosis.
B) A person chooses the most comprehensive health insurance offered every time, regardless of the benefit or cost.
C) A patient chooses to visit the dentist twice a year for checkups rather than once a month.
D) Congress chooses to continue debating the merits of alternative health policies.
E) None of the above.
Answer: C
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Chapter 3: Cost and Benefit Analysis
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Sample Questions
Q1) Cost-utility analysis assumes that life-years added due to a medical intervention are homogeneous.
A)True
B)False
Answer: False
Q2) Using the incremental cost-effectiveness ratio, if a new medical technology represents a positive net cost and negative net effect, then _______,
A) the new medical technology dominates the old medical technology
B) the relative costs and benefits must be reviewed further
C) the old medical technology dominates the new medical technology
D) the discount rate utilized should be changed
E) a standard gamble should be utilized
Answer: C
Q3) The use of a larger discount rate will result in a lower present value when estimating the costs and benefits of new medical technology.
A)True
B)False
Answer: True
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5
Chapter 4: Health Care Systems and Institutions
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Sample Questions
Q1) Fee-for-service reimbursement systems help reduce health care expenditures.
A)True
B)False
Q2) Increased consumer copayment requirements may help to reduce health care expenditures.
A)True
B)False
Q3) Switzerland'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
Q4) _______ 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.
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Chapter 5: The Demand for Medical Care
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Sample Questions
Q1) The _______ refers to the impact a lower price for medical care has on the real purchasing power of consumers.
A) income effect
B) inflation rate
C) effective demand
D) substitution effect
E) nominal demand
Q2) Which 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
Q3) As consumers purchase more medical care, the marginal utility per dollar spent on medical care increases.
A)True
B)False
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Chapter 6: The Demand for Medical Insurance: Traditional and Managed Care Coverage
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Sample Questions
Q1) According to John Nyman, the reduction in utility due to the payment of an insurance premium when healthy is less than the increase in utility from an equal income transfer when ill. Which of the following best explains why this is true?
A) As incomes increase, people gain greater utility from additional income.
B) When sick, people no longer behave rationally.
C) As incomes decrease, people gain greater utility from additional income.
D) When healthy, people are able to get more enjoyment from their income.
E) John Nyman is incorrect.
Q2) A _______ attempts to remove financial incentives of physicians to overuse by combining the insurer and provider functions of medical care.
A) network model HMO
B) PPO
C) POS
D) staff model HMO
E) IPA model HMO
Q3) Estimates of the income elasticity of demand for health insurance have found it to be an inferior good.
A)True
B)False
Page 8
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Chapter 7: Medical Care Production and Costs
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Sample Questions
Q1) If the average product of dental assistants is _______, then the marginal product of that labor must be _______ its average product.
A) increasing; less than B) decreasing; equal to C) decreasing; less than D) increasing; equal to E) decreasing; greater than
Q2) The _______ of nurses is represented as the total amount of medical services produced divided by the total amount of nurse-labor.
A) marginal product
B) marginal cost
C) average product
D) opportunity cost
E) none of the above
Q3) Previously paid sunk costs do not factor into most decisions since they can't be recouped.
A)True
B)False
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9
Chapter 8: Structure, Conduct, Performance, and Market Analysis
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Sample Questions
Q1) Collusion is most likely to occur within monopolistic competition.
A)True
B)False
Q2) Suppose that the inverse market demand for a new vaccine is P = 21,000 - 5Q, and the marginal cost is $10 per vaccine. Assuming that the manufacturer is profit-maximizing, how many units of this new vaccine will be produced?
A) 1,200
B) 750
C) 10,500
D) 1,400
E) 1,050
Q3) If the market price is greater than the marginal cost, a profit-maximizing firm will choose to produce less.
A)True
B)False
Q4) An increase in consumer income will lead to an increase in the quantity of medical care supplied.
A)True
B)False
10
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Chapter 9: Government, Health, and Medical Care
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Sample Questions
Q1) Suppose a government decides to subsidize flu vaccinations in an attempt to correct a market failure. Without this government intervention, 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
Q2) Suppose a manufacturer of artificial hips required any medical care provider to purchase a specific set of surgical tools along with each artificial hip. This would be an example of a _______.
A) exclusive dealing contract
B) most favored nation clause
C) tying contract
D) price ceiling
E) both a and b
Q3) Government funding of medical schools is an example of a supply-side subsidy.
A)True
B)False
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Page 11
Chapter 10: Government As Health Insurer
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Sample Questions
Q1) Medicare Part A is financed primarily through _______.
A) individual premiums
B) state governments
C) sales tax revenue
D) charitable care
E) payroll taxes
Q2) The majority of financing for Medicaid programs comes from _______.
A) the federal government
B) state governments
C) individual premiums
D) charitable care
E) none of the above
Q3) Which of the following is a key difference between Medicare and Medicaid?
A) eligibility requirements
B) financing methods
C) reimbursement methods
D) benefits offered
E) all of the above
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Page 12
Chapter 11: The Private Health Insurance Industry
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Sample Questions
Q1) _______ exist when the average total cost of providing insurance coverage decreases as a firm provides coverage for larger groups of people.
A) Moral Hazard
B) Asymmetric Information
C) Rationality
D) Scale Economies
E) Adverse Selection
Q2) Individuals who have access to large-group coverage are _______ likely to fall victim of cherry-picking behavior because the total cost of health insurance is distributed among a _______ number of subscribers.
A) less; larger
B) more; larger
C) less; smaller
D) equally; similar
E) equally; larger
Q3) Third-party payments provide incentives for the adoption of new technologies that may carry low benefits with high costs.
A)True
B)False
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Page 13
Chapter 12: The Physician Services Industry
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Sample Questions
Q1) Traditional fee-for-service payment mechanisms provide incentives to over utilize medical care.
A)True
B)False
Q2) Allowing physicians to patent and license practice strategies could help decrease price variations.
A)True
B)False
Q3) What are the two primary goals of the malpractice system?
A) Reduce the number of claims and deter negligence
B) Compensate victims and deter negligence
C) Reduce the number of claims and limit the size of awards
D) Increase the number of claims and compensate victims
E) none of the above
Q4) An increase in the use of physician extenders would decrease costs of providing medical care.
A)True
B)False
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Chapter 13: The Hospital Services Industry
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Sample Questions
Q1) Certificates of need promote price competition amongst hospitals.
A)True
B)False
Q2) 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 preference model
D) quality/quantity maximization model
E) utility maximization model
Q3) _______ relates to productivity or quality improvements observed over time irrespective of the quantity produced.
A) Sunk costs
B) System affiliation
C) Scale economies
D) Scope economies
E) Learning-by-watching
Q4) Most hospitals in the U.S. operate as for-profit firms.
A)True
B)False
Page 15
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Chapter 14: The Pharmaceutical Industry
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Sample Questions
Q1) _______ 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
Q2) The U.S. government decreases competition within the pharmaceutical industry through the issuing of patents.
A)True
B)False
Q3) High profits in the pharmaceutical industry may be a reflection of the greater risk incurred due to large research and development costs.
A)True
B)False
Q4) Drug-utilization reviews are used by third-party payers to rein in costs.
A)True
B)False
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Page 16
Chapter 15: The Long-Term Care Industry
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Sample Questions
Q1) Which of the following has been shown to discourage competition in the long-term care industry?
A) Certificates of need
B) Sunk costs
C) Scale economies
D) Predominance of Medicaid
E) None of the above
Q2) Which of the following are reasons why larger amounts of the population fail to purchase long-term care insurance?
A) Adverse selection
B) Moral hazard
C) Intertemporal risk
D) Both a and b
E) All of the above
Q3) Scale economies allow long-term care facilities to substantially decrease costs with only slight quality reductions.
A)True
B)False
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Chapter 16: Health Insurance Reform
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Sample Questions
Q1) While the U.S. spends more per capita on medical care, it possesses the lowest infant mortality rate amongst developed countries.
A)True
B)False
Q2) Which of the following policy actions would be most beneficial under the assumptions of Theory Y?
A) Install regulations to mitigate economic forces
B) Tax the sick
C) Discourage new medical technologies
D) Limit financial awards, which reduce the quality of care
E) equally; larger
Q3) Which of the generic health plans would provide the greatest variety of insurance plan offerings?
A) Managed competition
B) National health insurance
C) Medical savings accounts
D) Individual mandates
E) Both a and c
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