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Exam 9: The Health Care Market

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Question 1

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-In Table 9.2,Emily will loose no income if she becomes sick.

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Question 2

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We have read that the uninsured and the insured behave differently in regard to medical services.Suppose that the insured have a demand curve that can be written as Q = 100 - P,where Q is the quantity of medical services and P is the price.Suppose further that the uninsured have a demand curve that can be written as Q = 100 - 2P. (a)At a price of $10 of medical services,how much will each demand? (b)At a quantity of 50 units,how much will the price be for the insured and uninsured?

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(a)For insured at a price of $10,we have...

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Question 3

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President Obama has suggested some form or universal health coverage for all Americans.How do you feel about this?

Pooling individuals allow insurance companies to _______ risk from a societal point of view.

-In Figure 9.2,the value of insurance is $7,000.

When people behave in ways that involve increased risk because they have insurance,this is known as

What effect would a "price cap" have on medical services?

Suppose that the demand for medical services can be characterized by the equation X = 500 - P/3.Suppose further that the supply of health services can be characterized by the equation X = P - 100. (a)What is the equilibrium quantity and price in the market for health services? (b)In an effort to make health services more affordable,the government restricts the price of health services to be no greater than $250.What will happen to the quantity of health services in the market?

A co-payment and coinsurance are the same thing.

-In Figure 9.3,Panel B,$40,000 for certain is as desirable as $47,000 with risk.

A third-party payment is

We have read in this chapter that people with insurance may be more likely to engage in risky behavior because they are insured.Does it make sense then that there should be an "insurance tax" on people that engage in these types of activities?

Most private medical insurance is provided through employers as a benefit to their employees.

Paying money in order to guarantee a certain level of compensation should an adverse event occur is

Which country had the highest per capita expenditures on health care in 2004?

What percentage of African Americans are uninsured?

Which one of these conditions is not a part of asymmetric information?

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Health care markets may be inefficient because of

In 2007,the percentage of health care expenditures paid out-of-pocket was