Question : 39) Vaccinating people against a communicable disease such as influenza : 1387576

 

 

39) Vaccinating people against a communicable disease such as influenza not only reduces the chances that the person vaccinated will catch the disease but also reduces the probability that an epidemic of the disease will occur. Which of the following statements is true?

A) Reducing the chances that the person vaccinated will catch the disease is a private cost while reducing the probability of an influenza epidemic is a social benefit.

B) Vaccinating people against communicable diseases yields private benefits in excess of social benefits.

C) Reducing the chances that the person vaccinated will catch the disease is a private benefit while reducing the probability of an influenza epidemic is a social benefit.

D) The benefits of the influenza vaccination outweigh the costs.

 

 

40) In the United States, the bulk of health care spending is paid by health insurance companies. Such a system is also called a third-party payer system where consumers of health care pay a nominal fee and the rest are paid by the health insurance provider. Why might such a system lead to an inefficient outcome?

A) Health insurance companies have an incentive to control cost and therefore tend to deny consumers many cutting edge medical treatments.

B) Consumers have an incentive to over-consume health care services because they pay prices well below the cost of providing these services.

C) Physicians concerned that insurance companies may not approve payments tend not to order expensive tests for their patients.

D) Consumers fearing that excessive use of health care services may lead to a rise in insurance premiums tend to under-consume health care services.

 

41) How do current tax laws in the United States favor employer-based health care insurance?

A) Individuals who receive health insurance benefits are allowed to deduct the value of these benefits from their taxable income.

B) Employers who provide health insurance benefits are reimbursed by the government and are not taxed on these reimbursements.

C) Individuals who receive health insurance benefits do not pay taxes on the value of these benefits.

D) Health insurance companies that provide insurance to employers are subject to a lower tax rate than those insurance companies that provide insurance to private individuals.

 

 

42) In the market for insurance,

A) buyers often have more information than sellers.

B) sellers often have better information than buyers.

C) sellers are protected from lawsuits brought by buyers.

D) demand is perfectly inelastic because, by law, home owners and automobile drivers must have insurance.

 

 

43) What is the term that describes a situation in which one party to an economic transaction has less information than the other party?

A) inefficient market hypothesis

B) asymmetric information

C) unequal market structure

D) monopsony

 

44) Pricing insurance policies is made difficult because buyers have more information than sellers. This difficulty is an example of

A) moral hazard.

B) adverse selection.

C) asymmetric information.

D) the free rider problem.

 

 

45) The Pre-Existing Condition Insurance Plan is a federally administered part of the Affordable Care Act, and is designed for people with pre-existing medical conditions to obtain insurance. By offering health insurance to all U.S. citizens with pre-existing medical conditions, the Pre-Existing Condition Insurance Plan

A) eliminates asymmetric information for the insurer, but not for the insured.

B) eliminates asymmetric information for the insured, but not for the insurer.

C) eliminates asymmetric information for both the insurer and the insured.

D) reduces, but does not eliminate, asymmetric information for both the insurer and the insured.

 

 

46) In the United States, the bulk of health care spending is paid by health insurance companies. Such a system is also called a ________, where consumers of health care pay a nominal fee and the rest are paid by the health insurance provider.

A) universal health care system

B) third-party payer system

C) socialized medicine system

D) single-payer system

 

47) Consumers usually pay less than the total cost of medical treatment because

A) a third party, usually an insurance company, often pays most of the bill.

B) the federal government pays for most medical procedures.

C) competition forces doctors and hospitals to charge prices that do not cover their costs.

D) a third party, usually an employer, often pays most of the bill.

 

 

48) If a hospital knows that an insurance company will pay for most of a patient’s bill, the hospital has more of an incentive to require additional medical procedures and tests, even if the patient may not require them. This is an example of

A) moral hazard.

B) the principle-agent problem.

C) asymmetric information.

D) adverse selection.

 

 

 

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