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The table shows the hypothetical demand and supply schedule for health care. If there was
no health insurance, the equilibrium price and quantity of health care would be
195.
Quantity Supplied
Price
Quantity Demanded
12,000
$5,000
2,000
10,000
4,000
4,000
7,000
3,000
7,000
4,000
2,000
11,000
1,000
1,000
16,000
The table shows the hypothetical demand and supply schedule for health care. Assume that
health insurance pays two-thirds of the cost of health care. For the consumer, the price and
quantity of health care consumed would then be
24-82
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
Blooms: Remember
Difficulty: 01 Easy
Learning Objective: 24-04 List the demand and supply factors explaining rising health
care costs.
Test Bank: II
To pi c: Why the Rapid Rise in Costs?
196.
Quantity Supplied
Price
Quantity Demanded
12,000
$5,000
2,000
10,000
4,000
4,000
7,000
3,000
7,000
4,000
2,000
11,000
1,000
1,000
16,000
The table shows the hypothetical demand and supply schedule for health care. With
insurance paying two-thirds of the cost of health care, there would be a resulting allocative
197.
Quantity Supplied
Price
Quantity Demanded
12,000
$5,000
2,000
24-83
10,000
4,000
4,000
7,000
3,000
7,000
4,000
2,000
11,000
1,000
1,000
16,000
The table shows the hypothetical demand and supply schedule for health care. The
efficiency loss caused by the availability of health insurance paying two-thirds of the cost is
198.
Refer to the graph of a hypothetical market for health care. If there was not health
insurance, the equilibrium price and quantity of health care would be
199.
Refer to the graph for the health care market. The marginal cost of health care would be
greater than the marginal benefit if the quantity consumed were
24-85
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
Blooms: Remember
Difficulty: 01 Easy
Learning Objective: 24-04 List the demand and supply factors explaining rising health
care costs.
Test Bank: II
To pi c: Why the Rapid Rise in Costs?
Type: Graph
200.
Refer to the graph of a hypothetical market for health care. Assume that health insurance
pays four-fifths of the cost of health care. The consumer will end up consuming how many
units of health care and pay (out-of-pocket) how much for it per unit?
24-86
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
To pi c: Why the Rapid Rise in Costs?
Type: Graph
201.
Refer to the graph for the health care market. A health insurance plan that pays four-fifths
of the cost of a consumer's health care leads to
202.
Refer to the graph of a hypothetical market for health care. What would be the difference
between the marginal cost and the marginal benefit of health care when the 450th unit is
consumed?
203.
Refer to the graph of a hypothetical market for health care. The efficiency loss caused by
the provision of health insurance covering four-fifths of the cost is given by the area
204.
Refer to the graph of a hypothetical market for health care. The efficiency loss caused by
the provision of health insurance covering four-fifths of the cost is
205. The following are supply factors in the health care market, except
24-90
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A c c e s si b i l i ty : Keyboard Navigation
Blooms: Remember
Difficulty: 01 Easy
Learning Objective: 24-04 List the demand and supply factors explaining rising health
care costs.
Test Bank: II
To pi c: Why the Rapid Rise in Costs?
206. Which of the following would increase the supply of health care services?
207. Factors that have hampered the increase in the supply of physicians in the U.S. include
the following, except
208. Which of the following factors is not a reason why competitive pricing has not
developed in the health care industry?
24-91
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A.
The government bans competitive pricing in health care.
B. Consumers rarely shop around for health care providers.
C. Insurance covers most consumers' cost of health care.
D. Consumers are often wary of low prices in health care.
209. Theoretically, the effect of private health insurance on the price and quantity of health
care consumed
210. The reasons why health care costs in countries with public health insurance, like the
United Kingdom and Canada, have not risen as much as the costs in the U.S. include the
following, except
24-92
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Learning Objective: 24-04 List the demand and supply factors explaining rising health
care costs.
Test Bank: II
To pi c: Why the Rapid Rise in Costs?
211. Medicare and Medicaid set their payment rates for medical services above marginal
cost, but below average total cost. The rationale for doing this includes the following,
except
212. Medicare and Medicaid set their payment rates for medical services above marginal
cost, but below average total cost. One major consequence of doing this is that hospitals
and other providers are then
213. With an intent to identify potential cost savings (which unfortunately have not
materialized), the HITECH Act of 2009 provides $20 billion of subsidies to encourage
hospitals and physicians to
214. Attempts to alter incentives and contain health care costs include the following, except
215. The percentage of cost that an insured individual pays while the insurer pays the
remainder would be considered
24-94
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
the financial incentives facing either patients or health service providers.
Test Bank: II
To pi c: Cost Containment: Altering Incentives
216. The dollar sum of costs that an insured individual must pay before the insurer begins
to pay would be considered
217. Raising the deductibles and copayments is a way of dealing with the
218. Which of the following is not a characteristic of health savings accounts (HSAs)?
24-95
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
D.
Only workers can contribute to HSAs; employers cannot.
219. Some insurance companies have teamed with hospitals and doctors to provide
discounts for their services. The lists of cooperating doctors and hospitals are known as
220. A unit set up by insurance companies that requires hospitals and physicians to provide
discounted prices for their services as a condition for being included in the insurance plan
is a
24-96
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
To pi c: Cost Containment: Altering Incentives
221. A health care organization that contracts with employers to provide health insurance to
their workers, and hires doctors and other groups to provide health care for the workers
who are insured is a
222. One major difference between PPOs (preferred providers organizations) and HMOs
(health maintenance organizations) is that
223. The diagnosis-related group (DRG) system adopted by Medicare since 1983 has had
the following effects, except
