Core Economics 3e

Economics of Health Care

Multiple Choice Questions

After watching the Economics of Health Care video lecture, consider the question(s) below. Then “submit” your response.

Question

1. One factor increasing the demand for health care in the United States is the:

increase in the number of nurses and nurse practitioners.

decline in the birth rate.

increase in life expectancy.

reduction in government health care regulations.

Question

2. The obesity epidemic and its related conditions (Type-2 diabetes and heart disease) are factors partially responsible for the:

decreasing demand for apparel.

increasing demand for health care.

changes in health care regulations.

increase in students attending medical school.

Question

3. Factors that have reduced the demand for health care include improved safety features in cars, a decline in violent crime, and:

a reduction in the number of smokers.

increased use of smokeless tobacco.

increased use of mass transit for commuting.

increased automation in manufacturing.

Question

4. When the demand for health care rises, all else equal, the price of health care services should:

decline.

remain unchanged.

be regulated by the government.

rise.

Question

5. Though the supply of physicians has remained relatively stable, an increase in the number of ____ has tempered the rise in health care prices.

paramedics

nurses

X-ray techs

phlebotomists

Question

6. _____ can shift the supply curve for health care to the left.

Improving lifestyle choices

Increasing federal health care funding

Fraudulent health care billing practices

Static medical school graduation rates

Question

7. The cost of health care has risen in the United States because the factors that have increased demand have _____ the factors that increased supply.

outpaced

fallen short of

diminished

ignored

Question

8. The Affordable Care Act (ACA) requirement that insurance companies not deny coverage based on a pre-existing condition is designed to protect:

doctors.

hospitals.

consumers.

insurance companies.

Question

9. The provision of the Affordable Care Act that causes the most controversy is the:

increase in licensing requirements.

individual mandate.

pre-existing condition rule.

imposition of Medicare taxes.

Question

10. People who use emergency health care without the means to pay for this care are considered:

smart.

knowledgeable consumers.

to lack scruples.

free riders.

True/False Questions

After watching the Economics of Health Care video lecture, consider the question(s) below. Then “submit” your response.

Question

1. Reductions in smoking and violent crime and improvements in auto safety have the effect of moving the demand curve for health care to the right.

True

False

Question

2. Changes in government regulations that impose greater costs on the health care system reduce the supply of health care services.

True

False

Question

3. The Affordable Care Act’s (ACA) individual mandate means that each citizen is exclusively responsible for financing his or her own health insurance.

True

False

Short Answer/Discussion Questions

After watching the Economics of Health Care video lecture, consider the question(s) below. Then “submit” your response.

Question

1. Describe the factors that might move the health care demand curve to the right.

Suggested solution: Like most markets, the demand curve for health care services shifts to the right when demand for the good or services increases. As the population of the United States increases, the demand for health care grows. In addition, increases in life expectancy lead to increased demand for health care. Increases in obesity and related conditions cause increased demand for health care. The Affordable Care Act has increased the proportion of the population with health insurance and has consequently increased use of the health care system.

Question

2. What is the impact of the rise in popularity of the nursing profession and the increase in the number of nurse practitioners?

Suggested solution: Health care is a very staff-intensive industry. Increases in the number of nurses allow an increase in the health care system’s output capability in spite of the relatively stable number of physicians. This is especially true with the growing number of nurse practitioners. Nurses with these skills can perform many of procedures previously performed by physicians.

Question

3. What are arguments provided by opponents and supporters of the Affordable Care Act’s (ACA) individual mandate?

Suggested solution: The ACA’s individual mandate requires all citizens to have health insurance. Some opponents of this requirement believe the benefits of health insurance do not outweigh the costs. They object to being forced to buy something they don’t want to purchase. Many opponents believe the mandate goes against efficient market principles. Supporters of the mandate believe everyone will eventually need services from the health care system and therefore all should contribute to the system. Because hospitals are required to provide emergency services regardless of ability to pay, those without health insurance can impose costs on the rest of society and become free riders. Supporters believe that to avoid the free rider problem, all should be required to have health insurance.