Question 1

The largest share of health-care spending in the United States goes to:

Accepted Answer

Hospital care accounts for the largest share of health-care spending in the United States, reflecting the high costs associated with hospital stays, surgeries, and other inpatient and outpatient services.

Question 2

To keep health-care costs low, many countries other than the United States have:

Accepted Answer

Many countries implement rules or guidelines about who can undergo expensive medical procedures as a way to manage and control healthcare costs. This approach helps in prioritizing treatments based on necessity and effectiveness, thereby keeping overall healthcare expenditures lower.

Question 3

In the United States, one reason for the increase in health-care costs is:

Accepted Answer

Treatment advances often involve new technologies, medications, or procedures that are expensive. These costs are frequently covered by insurance, whether private or government-funded, contributing to the overall increase in health-care costs.

Question 4

Health-care spending in the United States is extremely high compared to other countries due primarily to the lack of strict price controls and lack of _____ that are used in most countries that offer universal coverage.

Accepted Answer

The answer of Health-care spending in the United States is...

Question 5

The United States spends roughly _____% more on health care than the second-biggest spender, Switzerland.

Accepted Answer

The United States spends about 25% more on health care than Switzerland, the second-biggest spender, highlighting the significant difference in health expenditure between the two countries.

Question 6

_____ for most of the increases in U.S. health-care spending since 1960.

Accepted Answer

Medical advances account for most of the increases in U.S. health-care spending since 1960 due to the development of new technologies, treatments, and drugs, which often come at a high cost.

Question 7

Despite higher spending levels, the United States lags other countries in:

Accepted Answer

The United States, despite its high healthcare spending, lags behind other countries in terms of life expectancy and infant mortality rates. This indicates issues with the overall effectiveness of its healthcare system in delivering outcomes that improve these fundamental health indicators.

Question 8

_____ medicine is a term used for a diagnostic test or treatment that is not normally required but is done to protect doctors against potential malpractice lawsuits.

Accepted Answer

Defensive medicine refers to the practice of recommending tests or treatments for the purpose of avoiding or defending against potential malpractice lawsuits, rather than because they are necessarily the best option for the patient.

Question 9

The American Medical Association's restrictions on the number of medical students, difficulties in opening new hospitals, and regulations prohibiting nurses from offering routine medical services are all examples of _____ in the health-care industry.

Accepted Answer

These examples illustrate barriers to entry in the health-care industry, as they represent obstacles that prevent new competitors from easily entering the market. Restrictions on the number of medical students limit the supply of new doctors, difficulties in opening new hospitals restrict the expansion of healthcare facilities, and regulations that prohibit nurses from offering routine medical services limit the scope of services that can be provided by non-doctor healthcare professionals.

Question 10

In the United States, higher demand and higher health-care costs can be attributed, in part, to subsidies and tax benefits, end-of-life care, defensive medicine, and:

Accepted Answer

Health insurance can lead to higher demand and costs due to moral hazard, where insured individuals consume more healthcare services than necessary because they do not bear the full cost.

Question 11

What is asymmetric information, and why does it result in market failure? Provide an example.

Accepted Answer

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Question 12

Assuming that information is symmetrical in a used-car market where both lemons and plums are sold, a separate equilibrium price for each quality level is reached. What happens when the information is asymmetrical?

Accepted Answer

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Question 13

Clarence is trying to decide between several different microwave ovens. He buys the microwave that offers a warranty. Why would a company offer a warranty, and what does it say to prospective buyers?

Accepted Answer

The answer of Clarence is trying to decide between several...

Question 14

What must insurance companies do to be profitable?

Accepted Answer

The answer of What must insurance companies do to be...

Question 15

What are two reasons that make it difficult for insurance companies to predict the amount of insurance claims they are likely to pay in the future?

Accepted Answer

The answer of What are two reasons that make it...

Question 16

Because moral hazard exists, why do insurance companies continue to offer insurance?

Accepted Answer

The answer of Because moral hazard exists, why do insurance...

Question 17

Why are some copayments high and some copayments low for health services?

Accepted Answer

The answer of Why are some copayments high and some...

Question 18

Explain how copayments and deductibles differ.

Accepted Answer

The answer of Explain how copayments and deductibles differ....

Question 19

What are the three major ways that the U.S. health-care system differs from the systems of other countries?

Accepted Answer

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Question 20

Discuss the five key provisions of the Affordable Care Act.

Accepted Answer

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Quiz 19: Information and Health Economics