NUR 4280 Healthcare Economics
Midterm Questions with Complete
Solutions.
Most expensive healthcare in the world (per capita and %) - Answer -U.S. spends the most
on healthcare
Health: a major source of uncertainty - Answer -people are uncertain when it comes to their
health so they take preventative actions
-uncertainty to demand health insurance because people don't know whats coming
Contagious - Answer -externalities
-other peoples health effecting you, & you effecting other people's health
-getting vaccinations cause positive externalities
-walking in public w/Ebola cause negative externalities
Reasons For High Healthcare Cost - Answer -improvement in quality of care which entails
increases cost
-more willingness to pay
-classification of treatment
-aging population
-chronic illness being treated
-profit motive & monopolistic influences
Outcome Measures (life expectancy, morbidity rate) - Answer -don't justify expenses
Government Improvement in Healthcare - Answer -government plays a huge role in
healthcare
-healthcare is always growing on the government balance sheet
Positive vs. Normative - Answer -positive issues are ideas of how the world actually is
-normative issues are different ideas of how the world should be
Structural Trends in Healthcare - Answer -move from private to public
-move from put of pocket to 3rd party financing
, Recession Impact - Answer -healthcare spending grew
-decrease in out of pocket spending
-medicare growth insulated
-medicaid enrollment has increased
Demand For Healthcare - Answer -people are price sensitive
-downward sloping
-people choose how much healthcare they want based off price
Randomized Experiment - Answer -a study that assigns treatments randomly to different
groups of study participants
Rand Study - Answer -different co payment groups & tracked different utilization of
healthcare in each co payment plan
Oregon Medicaid Study - Answer -compared 2 low income groups (medicaid lottery winners
vs. lottery losers)
Elasticity - Answer -change in quantity over change in price
-how a change in price of goods leads to a change in quantity demanded
Elasticity Equation - Answer = %change in quantity demanded/ %change in price
= (Q2-Q1)/Q1 / (P2-P1)/P1
Arc of Elasticity (midpoint) Equation - Answer [(Q2-Q1)/(Q2+Q1)] / [(P2-P1)/(P2+P1)]
Elastic - Answer = elasticity > 1
Inelastic - Answer = elasticity < 1
Unitary - Answer = elasticity = 1
Consumption Goods - Answer -something we enjoy & get utility from
- (H)= ones level of health
- (Z)= a compensated good that represents everything else, (video games, paintball, time with
friends) (home good)
Midterm Questions with Complete
Solutions.
Most expensive healthcare in the world (per capita and %) - Answer -U.S. spends the most
on healthcare
Health: a major source of uncertainty - Answer -people are uncertain when it comes to their
health so they take preventative actions
-uncertainty to demand health insurance because people don't know whats coming
Contagious - Answer -externalities
-other peoples health effecting you, & you effecting other people's health
-getting vaccinations cause positive externalities
-walking in public w/Ebola cause negative externalities
Reasons For High Healthcare Cost - Answer -improvement in quality of care which entails
increases cost
-more willingness to pay
-classification of treatment
-aging population
-chronic illness being treated
-profit motive & monopolistic influences
Outcome Measures (life expectancy, morbidity rate) - Answer -don't justify expenses
Government Improvement in Healthcare - Answer -government plays a huge role in
healthcare
-healthcare is always growing on the government balance sheet
Positive vs. Normative - Answer -positive issues are ideas of how the world actually is
-normative issues are different ideas of how the world should be
Structural Trends in Healthcare - Answer -move from private to public
-move from put of pocket to 3rd party financing
, Recession Impact - Answer -healthcare spending grew
-decrease in out of pocket spending
-medicare growth insulated
-medicaid enrollment has increased
Demand For Healthcare - Answer -people are price sensitive
-downward sloping
-people choose how much healthcare they want based off price
Randomized Experiment - Answer -a study that assigns treatments randomly to different
groups of study participants
Rand Study - Answer -different co payment groups & tracked different utilization of
healthcare in each co payment plan
Oregon Medicaid Study - Answer -compared 2 low income groups (medicaid lottery winners
vs. lottery losers)
Elasticity - Answer -change in quantity over change in price
-how a change in price of goods leads to a change in quantity demanded
Elasticity Equation - Answer = %change in quantity demanded/ %change in price
= (Q2-Q1)/Q1 / (P2-P1)/P1
Arc of Elasticity (midpoint) Equation - Answer [(Q2-Q1)/(Q2+Q1)] / [(P2-P1)/(P2+P1)]
Elastic - Answer = elasticity > 1
Inelastic - Answer = elasticity < 1
Unitary - Answer = elasticity = 1
Consumption Goods - Answer -something we enjoy & get utility from
- (H)= ones level of health
- (Z)= a compensated good that represents everything else, (video games, paintball, time with
friends) (home good)
