Which of the following is not an advantage of risk pooling?
A) By insuring large groups as opposed to individuals, health insurance providers reduce adverse selection.
B) It gives very sick people in the group the same access to health care and to pay the same premiums as healthy individuals.
C) It is easier for an insurance company to estimate the average number of claims likely to be filed under a group policy than it is to predict the number of claims likely to be filed under an individual policy.
D) Individuals who are insured and therefore do not have to pay the full cost of health care services may be inclined to over-use those services.
Answer: D
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Refer to Figure 6-6. As price falls from PA to PB, the quantity demanded increases most along D1; therefore
A) D1 is more elastic than D2 or D3 B) D1 is more inelastic than D2 or D3. C) D1 is elastic at PA but inelastic at PB. D) D1 is unit elastic.
If the marginal benefit were greater than the cost of a good:
A. consumers could increase their utility by buying more. B. consumers could increase their utility by buying less. C. producers should decrease production. D. social net benefit would be maximized.
A decrease in the price of a good will a. increase demand
b. decrease demand. c. increase quantity demanded. d. decrease quantity demanded.
Third-party payments by either the government or an insurance company accounted for ____ of the 2011 healthcare expenditures, compared to ____ paid by third parties in 1960
a. 40 percent; 20 percent b. 20 percent; 40 percent c. 86 percent; 45 percent d. 96 percent; 73 percent