Health Economics Theory Insights And Industry Studies 6th Edition By Dr. Rexford E. – Test Bank

Health Economics Theory Insights And Industry Studies 6th Edition By Dr. Rexford E. – Test Bank

Santerre/Neun 6e Chapter 5 Test Bank

1. When will the marginal utility per dollar spent on medical care equal the marginal utility per dollar spent on entertainment for a consumer? a. This will only occur when the consumer becomes ill. b. This will only occur when the consumer is healthy. c. This will only occur if the consumer seeks to maximize utility. d. This will only occur if the consumer does not enjoy most forms of entertainment. e. This will never occur. 2. Consumer demand for medical care is considered a _______ demand, as it depends on the consumer’s demand for good health. a. absolute b. derived c. relative d. supplemental e. supply-side 3. The _______ refers to the impact a lower price for medical care has on the real purchasing power of consumers. a. income effect b. inflation rate c. effective demand d. substitution effect e. nominal demand 4. Time costs of acquiring medical care are considered _______. a. direct non-medical costs b. direct medical costs c. opportunity costs d. both a and b e. both a and c 5. Insurance _______ the price for medical care, thereby _______ the demand for it. a. increases; decreases b. decreases; decreases c. increases; increases d. decreases; increases e. None of the above 6. A _______ represents a fixed amount paid by the consumer that is independent of the market price or actual costs of medical care. a. deductible b. loading charge c. coinsurance rate d. claim e. copayment 7. Which of the following might occur after acquiring health insurance due to moral hazard? a. A consumer visits a doctor more frequently. b. A consumer washes his / her hands more frequently. c. A consumer eats healthier. d. All of the above e. None of the above 8. The _______ refers to how much more or less of a product consumers buy when its price changes. a. intensive margin b. extensive margin c. nominal demand d. effective demand e. fuzzy demand 9. The _______ refers to how many more or fewer people buy a product when its price changes. a. intensive margin b. extensive margin c. nominal demand d. effective demand e. fuzzy demand 10. A positive cross-price elasticity estimate between in-patient and out-patient services at a hospital would imply that the two are _______. a. normal goods b. inferior goods c. compliments d. substitutes e. unrelated 11. As consumers purchase more medical care, the marginal utility per dollar spent on medical care increases. a. True b. False 12. Since the demand for medical care is derived from the demand for good health, an increase in income will decrease the demand for medical care. a. True b. False 13. Larger deductible requirements decrease the risk of moral hazard. a. True b. False 14. Demand for most medical services in the U.S. has been found to be inelastic. a. True b. False 15. A negative income elasticity of demand for out-patient services would imply that it is an inferior good. a. True b. False Answers: 1. c 11. b 2. b 12. b 3. a 13. a 4. c 14. a 5. d 15. a 6. e 7. a 8. a 9. b 10. d