Introduction to Health Economics Practice Exam
Course Introduction
Introduction to Health Economics offers an overview of how economic principles and methodologies are applied to healthcare systems and decision-making. The course explores fundamental concepts such as supply and demand, resource allocation, efficiency, health insurance, and the role of government in healthcare. Students learn how to evaluate the costs and benefits of medical interventions, understand the economic factors influencing health behaviors and outcomes, and examine current issues such as rising healthcare costs and access to care. By the end of the course, students will be equipped to critically analyze health policy debates using an economic perspective.
Recommended Textbook Health Care Economics 7th Edition by
Paul J. Feldstein
Available Study Resources on Quizplus
18 Chapters
357 Verified Questions
357 Flashcards
Source URL: https://quizplus.com/study-set/1434
Page 2
Chapter 1: An Introduction to the Economics of Medical Care
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/28481
Sample Questions
Q1) In the graph above,the opportunity cost in defense dollars associated with moving toward more medical expenditures is
A)Increasing
B)Decreasing
C)Constant
D)Increasing then decreasing
E)Decreasing the increasing
Answer: A
Q2) In a competitive market,firms will continue to produce until marginal cost is equal to A)Price
B)Marginal revenue
C)Both a and b
D)Neither a and b
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: The Role of Government in Health and Medical Care
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/28482
Sample Questions
Q1) Each inpatient day at the teaching hospital helps train medical residents to become better physicians.This has a social external benefit MEB to society of $200 per inpatient day.Graph the MEB curve and find the socially optimal price and quantity.
Answer: In this case,the socially optimum quantity is found where the MPC = MPB+MEB. 200=1200-4Q
4Q=1000
Q=250
11ea48be_8915_1e30_b057_d99a1cfb28c0_TB2105_00
Q2) Which of the following is an example of an externality in the cigarette market?
A)firsthand smoke
B)secondhand smoke
C)Increase in the price of tobacco
D)Increase in the price of a competitors' cigarettes
Answer: B
Q3) Graph the Marginal Private Cost (MPC)and the Marginal Private Benefit.
Answer: 11ea48be_8914_81ef_b057_a5da371a5ee7_TB2105_00
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: Health Policy and the Legislative Marketplace
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/28483
Sample Questions
Q1) Dental hygienists are considered compliments to dentist.Therefore,dentists would support legislation
A)Allowing dental hygienists to independently open dental offices.
B)Limiting the expansion of dental hygienists.
C)Requiring additional education to become a dental hygienist.
D)None of the above
Answer: D
Q2) The ADA would support and should be an expansion in _______ dental insurance
A)Public
B)Private
C)Both a and b
D)Neither a nor b
Answer: B
Q3) Which of the following organizations would not support a bill expanding the supply of nurses to hospitals?
A)AMA
B)ANA
C)AHA
D)AAMC
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: The Production of Health: the Impact of Medical
Services on Health
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/28484
Sample Questions
Q1) According to Victor Fuchs' research on infant mortality,the reduction of infant mortality between 1900 and 1930 following events,except
A)Chlorination of water
B)Increased literacy
C)Decreased birthrate
D)Pasteurization of milk
E)Medical care
Q2) A process that determines how many dollars will be returned for dollars invested in a health promotion program is called
A)cost-benefit analysis
B)cost-revenue analysis
C)cost-utility analysis
D)cost-effectiveness analysis
Q3) Between 1968 and 1976,medical intervention accounted for
A)More than 60% of the decline in ischemic heart disease mortality
B)Between 40 and 60% of the decline in ischemic heart disease mortality
C)Less than 40% of the decline in ischemic heart disease mortality
Q4) Compare cost-utility analysis to cost-effective analysis.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: An Overview of the Medical Care Sector
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/28485
Sample Questions
Q1) If nurses and physicians are complements in the hospital production function,then an increase in the tuition to nursing school will
A)Increase the quantity demanded for both nurses and physicians.
B)Decrease the quantity demanded for both nurses and physicians.
C)Increases the quantity demanded for nurses,but decreases the demand for physicians.
D)Decreases the quantity demanded for nurses,but increases the demand for physicians.
Q2) Suppose the state legislature passes a state mandate on mammography exams.Which of the following will occur?
A)The price of mammography exams will increase.
B)The wages of registered radiologic technologists will increase.
C)Both a and b.
D)Neither a nor b.
Q3) Which type of market is not present in the medical care sector?
A)Institutional
B)Management
C)Manpower
D)Educational
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: The Demand for Medical Care
Available Study Resources on Quizplus for this Chatper
19 Verified Questions
19 Flashcards
Source URL: https://quizplus.com/quiz/28486
Sample Questions
Q1) Assume that the patient's out-of-pocket price for visiting a physician is $30 and that the time costs are equal to $50.Assume the elasticity of the medical service,with respect to the total price,was -2.0.If the out-of-pocket price dropped 50 percent,by what percent does the number of visits change?
Q2) Which of the following business strategies are used by health insurance companies to curb physician-induced demand?
A)Requiring prior authorization before administering a treatment/procedure
B)Providing physicians with financial incentives to reduce overall cost
C)Requiring patients to seek a second opinion for high-cost treatments/procedures
D)All of the above
E)None of the above
Q3) After the introduction of Medicare and Medicaid,the increase in medical expenditures can be explained by a
A)Less than 25% increase in prices
B)25% to 50% increase in prices
C)50% to 75% increase in prices
D)Greater than 75% increase in prices
Q4) Discuss the role of physicians on patients' demand for medical services.
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: The Demand for Health Insurance
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/28487
Sample Questions
Q1) Which of the following policies limits the extent of moral hazard in the health insurance market?
A)Stop loss
B)Large deductibles
C)Varying co-insurance rates
D)All of the above
E)None of the above
Q2) For a risk-averse consumer
A)The expected utility of wealth is greater than the utility of expected wealth
B)The expected utility of wealth is equal to the utility of expected wealth
C)The expected utility of wealth is less than the utility of expected wealth
D)There is no relationship between the expected utility of wealth and the utility of expected wealth
Q3) Calculate the expected return (or expected winnings)in a game where a person wins $1 with the probability of 1/3 ,$5 with the probability of1/6 ,and $0 with the probability of 1/2 .
A)0
B)$1 1 / 6
C)$2 1 / 6
D)$3
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: The Supply of Medical Care: an
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/28488
Sample Questions
Q1) When the patient _______ information,the physician demand curve becomes
A)Lacks;more elastic
B)Lacks;less elastic
C)Lacks;has no effect on demand
D)More;less
Q2) The marginal cost curve is upward sloping because
A)Total productivity is rising with production
B)Total productivity is falling with production
C)Marginal productivity is rising with production
D)Marginal productivity is falling with production
Q3) Economies of scale
A)Might be more easily realized in an emergency room rather than a physician's office.
B)Depend on the spreading of minimal fixed costs over a number of procedures.
C)Depend on the spreading of high variable costs over a number of procedures.
D)Depend on the spreading of high marginal costs over a number of procedures.
E)Depend on the spreading of high fixed costs over a number of procedures.
Q4) If a hospital displays decreasing average costs on output,should the hospital be regulated even though it is more efficient?
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Market Competition in Medical Care
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/28489
Sample Questions
Q1) The failure of capitation payments is due to
A)Providers' inability to access risk
B)Providers' inability;risk-adjustment claims to insurers
C)Conflict with respect to the method;specialists of payment between primary care physicians and specialist.
D)All of the above
E)None of the above
Q2) Explain how the new payment system for hospitals instituted by the National Health Services of Britain affected hospital stay length,expenditures,and mortality.
Q3) What does the Rand HMO experiment tell us about the effect of HMOs on hospitalized utilization?
Q4) Certificate of Need
A)Forced hospitals to gain government approval before commencing capital improvements
B)Caused medical care expenditures to increase
C)Both a and b
D)Neither a nor b
Q5) Compare the quality difference in care between HMOs and traditional health insurance.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: The Market for Health Insurance: Its
Performance and Structure
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/28490
Sample Questions
Q1) If the health insurance premium is equal to $2,000 and administrative fees are $500,then what is the benefit/premium ratio?
A).25
B).50
C).75
D)Cannot be calculated with the above information
Q2) Assume the health insurance market is perfectly competitive.If the benefit/premium ratio is 0.90 and the premium is $1,000,how much are administrative cost?
Q3) Assume a high-risk person;has a 0.50 probability of a $500 medical expense and a low-risk person has a 0.10 probability of a $500 medical expense.Both types of people are risk neutral.What is the community rating premium for a neighborhood containing exactly half of each type of person?
A)$300
B)$250
C)$150
D)$50
Q4) Explain why the use of community-rated premiums leads to economic inefficiencies.
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: The Physician Services Market
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/28491
Sample Questions
Q1) Physicians who accept assignment on their Medicare patients
A)Bill patients for 80% of the allowable fee
B)Agree to forego balance billing
C)Accept the allowable fee for all services
D)Agree to charge private insurance patients the same fees as Medicare patients
E)Both b and c
Q2) Which of the following will not change the demand for office visits to the physician?
A)Unusually cold and damp weather during the winter
B)A change in the price of an office visit
C)Layoffs at the local plant causing a decrease in the number of people with health insurance in the community
D)Television advertising by drug manufacturers to promote a new over-the-counter influenza treatment
E)They all change the demand for office visits
Q3) Physician-induced demand
A)Increases medical prices
B)Increases use of medical services
C)Both a and b
D)Neither a nor b
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: The Market for Hospital Services
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/28492
Sample Questions
Q1) The cost per patient day at Hospital A is much higher than the cost per patient day at Hospital B.This might be due to
A)Hospital A has sicker patients than Hospital B
B)Hospital A is an academic medical center and Hospital B is not
C)Hospital A has several long-term union labor contracts while Hospital B does not
D)Hospital B is more efficient than Hospital A
E)All of the above are possible
Q2) You are a consultant and have been employed by a large inner-city hospital called City Hospital to estimate the demand for its services.Your research indicates that the income elasticity of demand for the target market is +0.50;the price elasticity of demand is -0.15;and the cross-price elasticity of demand with respect to the price of services at Rural Hospital,a near-by hospital,is +0.35.Answer the following questions.
If a hospital is experiencing economies of scale,
A)Its average cost curve is positively sloped as output increases
B)Its average cost curve is negatively sloped as output increases
C)It should reduce its output level to lower costs
D)Quality is falling as output is rising
E)Both b and c are true
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: The Pharmaceutical Industry
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/28493
Sample Questions
Q1) Suppose there is a new drug in the pipeline that will reduce infant mortality in half from .05 to .025,but the drug will not be approved by the FDA for 3 years.If 10,000 children are afflicted each year,what is the number of statistical deaths that could have been avoided with earlier FDA approval?
Q2) Which drug type is expected to have a higher markup over cost?
A)Innovation drugs
B)"Me-too" drugs
C)Both have about the same markup
Q3) According to Duggan and Morton,the reduction in overall drug expenditures
A)Is due to a decrease in prices by pharmaceutical companies
B)Is due to an increase in prices by pharmaceutical companies
C)Is due to the ability of private plans to drive the use of drugs toward less expensive therapeutic substitutes
D)Is due to the ability of Medicare Part D plans to drive the use of drugs toward less expensive therapeutic substitutes
Q4) For pharmaceutical drugs,R&D expenditures account for
A)Over two-thirds of expenses
B)Between one-third and two-thirds of total expenses
C)Less than one-third of expenses
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Health Manpower Shortages and Surpluses:
Definitions, measurement, and Policies
Available Study Resources on Quizplus for this Chatper
18 Verified Questions
18 Flashcards
Source URL: https://quizplus.com/quiz/28494
Sample Questions
Q1) Explain how the current market for residencies is anticompetitive and how market competition would correct the current situation.
Q2) What are the potential pitfalls of using the ratio technique to determine shortages/surpluses?
Q3) Regulators and advocates argue that licensure is appropriate because it:
A)Ensures that patients get high-quality care
B)Increases remuneration to those with the licenses
C)Reduces the incidence of deficient care
D)Both a and c
Q4) Bullet County has 100,000 residents.During any given year,2% of the population will develop a medical condition that requires 10 hours of physician treatment.Assuming the average physician works 2,000 hours per year,how many physicians are needed in Bullet County?
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: The Market for Physician Manpower
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/28495
Sample Questions
Q1) Describe how barriers to entry would decrease the quality of care.
Q2) Which of the following is not a barrier to entry into the physician profession?
A)High membership fees into medical societies
B)Medical school accreditation
C)Longer residency programs
D)State Licensing
Q3) Education,feedback,and surveillance programs are concerned with:
A)Reducing the amount of inappropriate medical care
B)Increasing patient access to the latest medical technology
C)Retaining a qualified hospital staff
D)The low enrollments in medical school
Q4) In his classic article entitled "Price Discrimination in Medicine," Kessel claimed that control over physicians' pricing behavior was related to
A)Hospital privileges
B)Membership into medical societies
C)Protection of low-income patients
D)Both a and b
E)Both a and c
Q5) Explain how barriers to entry can cause static shortages of health professionals.
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: The Market for Medical Education: Equity and Efficiency
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/28496
Sample Questions
Q1) If medical schools are not using tuition to ration students,what mechanism is being used to ration students and to what end?
Q2) The net effect of the externality on welfare is equal to
A)d + f
B)i
C)h
D)i + d + f + h
Q3) Income Contingent Loan Repayment Plans (ICLRP)have been proposed to encourage medical school graduates to
A)Locate to a rural area
B)Work with underserved populations
C)Locate to an urban area
D)None of the above
Q4) The use of fluorine in public tap water to reduce cavities is an example of a
A)Negative externality
B)Positive externality
C)Public good
D)Private good
Page 18
Q5) How do we determine economic efficiency in the supply of medical schools?
Q6) What would be an economic justification for subsidizing a medical education?
To view all questions and flashcards with answers, click on the resource link above.
Page 19
Chapter 17: The Market for Registered Nurses
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/28497
Sample Questions
Q1) What are the benefits and cost of a comparable worth-based wage determination system.
Q2) Explain how the introduction of Medicare resolved the issues of "static shortages" in nursing.
Q3) According to Gruber and Kleiner,in-hospital mortality due to a nurses' strike
A)Increased by 19%
B)Decreased by 19%
C)Increased by 6.5%
D)Decreased by 6.5%
Q4) Immigrants constitute ______ of the growth in nurses between 2001 to 2008.
A)1/10
B)1/5
C)1/3
D)1/2
Q5) Currently,the number of registered nurses
A)Exceeds 2 million
B)Is between 2 million and 1 million
C)Is between 1 million and 500,000
D)Less than 500,000
Q6) Explain why prior to 1966,the nursing market was experiencing a static shortage.
To view all questions and flashcards with answers, click on the resource link above. Page 20
Chapter 18: National Health Insurance: an Approach to the
Redistribution of Medical Care
Available Study Resources on Quizplus for this Chatper
20 Verified Questions
20 Flashcards
Source URL: https://quizplus.com/quiz/28498
Sample Questions
Q1) Infant mortality is higher in Canada than in the United States
A)True
B)False
Q2) Hospital services are covered by
A)Medicare Part A
B)Medicare Part B
C)Medicare Part C
D)Medicare Part D
Q3) Explain how a comparative effectiveness board could reduce health care cost.
Q4) Life expectancy is higher in Canada than in the United States.
A)True
B)False
Q5) The Children's Health Insurance Plan of 1997 provides insurance for A)Infants
B)Pregnant women
C)Low-income children
D)All of the above
Q6) Why is deficit financing politically appealing?
Q7) According to Long and Stockley,what are the benefits and cost of the Massachusetts Health Plan? Page 21
To view all questions and flashcards with answers, click on the resource link above.
Page 22