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Assignment 14

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Question 1 (1 point)
The percentage of the U.S. population over age 65 is expected to
  1. decline dramatically.
  2. grow rapidly until the year 2000, and then grow more slowly.
  3. decline slightly.
  4. continue to grow.
  5. increase dramatically for the female population but decrease slightly for the male population.
Question 2 (1 point)
The aging of the American population has brought to the forefront of the nation the concern that social security is no longer a viable option for future retirees, and the financial viability of the system depends
  1. on the ratio of those working to those retired.
  2. on the interest rate in effect at the time a contributor is eligible to begin collecting from the fund.
  3. on the interest rate in effect over the entire course of time that a contributor has paid into the fund.
  4. on how much each retiree has contributed over his lifetime to his individual social security account.
  5. on the interest rate in effect at the time a contributor first began to contribute to his individual social security account.
Question 3 (1 point)
Which of the following provides the best description of the Social Security System in the U.S.?
  1. Funds that were deposited in a trust fund and allowed to accumulate interest-free for use in future years.
  2. Funds that were deposited in a trust fund and allowed to accumulate at market rates of interest for general use in future years.
  3. The Social Security System is designed to be a transfer payment which simply taxes the working population today and pays benefits for current retirees from the proceeds of that tax.
  4. Funds that were deposited in a trust fund and allowed to accumulate at market rates of interest for the use in future years only by the individuals who voluntarily deposited the funds.
  5. A trust fund into which every American citizen has voluntarily paid a certain amount of money each year.
Question 4 (1 point)
The ratio of workers to social security beneficiaries has declined from 16.5 percent in 1950 to about 3 percent today and is expected to decline to 2 percent by 2030. This trend means that the source of social security benefits is
  1. getting relatively larger.
  2. getting relatively smaller.
  3. staying about the same, taking into consideration inflation.
  4. going to continue to support the beneficiaries for as long as necessary.
  5. None of these.
Question 5 (1 point)
Most of the money spent on health care in the U.S. goes toward
  1. hospital services.
  2. AIDS victims.
  3. nursing-home expenditures.
  4. physicians' services.
  5. medical research and administration.
Question 6 (1 point)
Medicare is a federal program that provides health care for
  1. the elderly and disabled.
  2. poor families who could not otherwise obtain health care.
  3. the homeless.
  4. victims of AIDS, child abuse, and drug addiction.
  5. military personnel on active duty only.
Question 7 (1 point)
Rising costs or expenditures for health care mean that
  1. government intervention is warranted to slow the increase.
  2. a surplus of medical care exists.
  3. the demand has risen relative to supply.
  4. the quantity demanded is less than the quantity supplied.
  5. physicians are able to effectively gouge consumers by exercising their monopoly power.
Question 8 (1 point)
What is the result of the aging population on the price of health care?
  1. Demand for health care rises and the price declines.
  2. The age of the population has no relation to the price of health care.
  3. Demand for health care rises and the price increases.
  4. Demand for health care falls and the price declines.
  5. The price is not likely to change since supply is the only important factor in the health care market.
Question 9 (1 point)
Which of the following is the most significant reason for the increased demand for medical care?
  1. A decrease in the elderly's share of medical expenditures
  2. A decrease in the average age of the population
  3. The number of nursing homes constructed annually has risen.
  4. Medicare and Medicaid programs have increased individuals' ability to pay for medical services.
  5. Medical technology has not improved significantly over the past decades.
Question 10 (1 point)
The high cost of hospital care is attributable in large part to
  1. the tremendous cost of "defensive medicine" and malpractice insurance.
  2. the fact that hospitals frequently have a shortage of nurses and emergency medical technicians.
  3. the chronic problem of a lack of hospital beds, thus driving up the cost.
  4. physician greed.
  5. inefficiency and excess capacity.
Question 11 (1 point)
Hospital efficiency is typically measured in terms of
  1. minimum average total cost.
  2. minimum marginal cost.
  3. amount of funding received through government programs such as Medicare or Medicaid.
  4. total costs per employee.
  5. expenditures per care or per patient-day.
Question 12 (1 point)
What is the fastest-growing health care expenditure category in recent years?
  1. Hospital administration
  2. AIDS treatment
  3. Prescription drugs
  4. Cancer treatment
  5. None of these.
Question 13 (1 point)
Scenario 2
Suppose that the initial demand for and supply of hospital beds in Anytown, U.S.A., is as shown by curves D and S 1 in the figure below. If the hospital receives permission to expand, its new supply curve will be S 2 . Price level P 1 is the fixed prospective payment reimbursement rate paid by Medicare to the hospital, regardless of actual cost.
Price vs Quantity of Hospital Beds
According to the information in the scenario and figure above, given the existing demand for its beds, after the hospital completes its expansion it will maximize its occupancy rate by charging price level
  1. P 2 .
  2. P 3 .
  3. P 1 .
  4. P X , where this price is greater than the fixed reimbursement rate P 1 .
  5. (P 1 + P 2 )/2; this is the average demand price.
Question 14 (1 point)
For the past twenty-five years, the ratio of physicians to the population they serve has
  1. declined steadily as doctors give up their practices.
  2. declined steadily as doctors chose to practice abroad.
  3. increased in hospital settings, but declined for the doctor with his or her own office.
  4. increased steadily.
  5. been fairly stable; while some areas of specialty have many more doctors per capita, others have many fewer across the board.
Question 15 (1 point)
The percentage of health-care expenditures that can be directly attributed to malpractice suits is closest to
  1. 25 percent.
  2. between 5 and 10 percent.
  3. 1 percent.
  4. 50 percent.
  5. 10 percent.
Question 16 (1 point)
Which of the following is not a basic type of HMO?
  1. Medical group
  2. Holistic management organizations
  3. Independent practice associations (IPAs)
  4. Staff
  5. Networks
Question 17 (1 point)
Which type of health maintenance organization hires physicians as salaried employees?
  1. Independent practice associations
  2. Medical group HMOs
  3. Networks
  4. Staff HMOs
  5. Preferred provider organizations
Question 18 (1 point)
HMOs and PPOs have come about because of the
  1. erosion of standards formerly set by the federal government.
  2. increasing shortage of physicians in certain key specialties.
  3. steady decrease in the number of hospital beds nationwide.
  4. perceived lack of quality care provided by many clinics.
  5. increased costs of medical care.
Question 19 (1 point)
Which of the following effects does an HMO have on the health-care market?
  1. It alters incentives faced by individuals.
  2. It reduces the demand for health care.
  3. It increases the demand for health care.
  4. It reduces the supply of health care.
  5. It increases the supply of health care.
Question 20 (1 point)
According to the text, what makes health care different from any other good or service is
  1. the demand curve for health care does not slope down.
  2. the supply of health care does not slope up.
  3. people feel like they have an inalienable right to health care.
  4. there is no scarcity of health care.
  5. people do not have to make choices when it comes to health care.
Question 1 (4.00 points)
What is social security? What is Medicare? What is the economic role of these government policies?
Question 2 (3.00 points)
What is the economic logic of increasing social security benefits?
Copyright 2008, by the Contributing Authors. Cite/attribute Resource . admin. (2009, January 27). Assignment 14. Retrieved January 07, 2011, from Free Online Course Materials — USU OpenCourseWare Web site: This work is licensed under a Creative Commons License Creative Commons License