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Hello BrainMass OTAs, Today I need your help on the attached multiple choice and fill in the blank economics questions. Please be very careful in
Hello BrainMass OTAs,Today I need your help on the attached multiple choice and fill in the blank economics questions. Please be very careful in that our study group will check each answer throughly against the assigned text. 1. Economists use the term âmarginalâ to describe costs and benefitsthat are minimal and hardly worth noting.that are incremental and thus relevant to decision making.that are noteworthy but not the most important.whose importance can be minimized through hard work.2. Charging higher prices for one category of patients in order toprovide free or subsidized care to another group is calledprice discrimination.cost-shifting.categorical costing.creative accounting.3. If a hospital is experiencing economies of scale,its average cost curve is positively sloped as output increases.its average cost curve is negatively sloped as output increases.it should reduce its output level to lower costs.quality is falling as output is rising.4. A person with AIDS applies for health insurance but hides his healthstatus from the insurance company. What is the likely result for theinsurance company?Principle-agent problem.Rational ignorance.Externalities.Adverse selection.5. Insurers try to minimize moral hazard byonly selling policies to individuals with high ethical standards.requiring advance payments of premiums.charging higher premiums to individuals than to groups.charging deductibles and coinsurance.6. Capitation:creates pressures to provide fewer services.is a fixed payment determined in advance to pay for all medicallynecessary care.shifts financial risk onto providersAll of the above7. A fee schedule based on diagnosis-related groups can set up anincentive toovertreat patients by recommending more care than is not desired.try expensive, experimental procedures on covered patients.withhold potentially useful procedures just to save money.All of the above8. In an agency relationship, the ________ acts as an agent for the_________, the principal.insurer; government.government; insurer.provider; patient.patient; provider.9. The _______ hypothesis suggests that physicians induce demand toachieve a particular level of income:Roemer.target income.Wennberg.disutility of discretion.10. Prospective payment generally reimburses hospitals at:a sliding rate based on the hospitalâs profitability.an increasing rate depending on the length of stay.a decreasing rate depending on the length of stay.a fixed rate.11. An often-made assumption in the model of demand and supply is theindependence of demand and supply curves. If the two are notindependent in health care demand and supply, a shift in the supplycurve can lead to a shift in the demand curve referred to assupply-side economics.supplier-induced demand.supply shocks.ceteris paribus.12. The optimal level of output may be defined as that level of outputwhereaverage benefit exceeds average cost by the greatest amount.total benefit equals total cost.marginal benefit exceeds marginal cost by the greatest amount.the marginal benefit of the last unit purchased equals its marginalcost.13. The portion of the health insurance premium that is added to thepure (actuarially fair) premium to include administrative expense andprofit is the ________________..14. Laws that lessen price competition in that they permit theparticipation of any physician in an insurerâs provider panel, therebynegating providersâ incentives to complete on price to be included inthe panel, are referred to as _________________.15. _______________ is an approach to estimating economies of scale byexamining the size distribution of firms in an industry to determinewhich size of firms become more numerous.16. _________________ are non-cash subsidies provided to specificbeneficiary groups based on the donorâs (middle classâ) preferences.17. A market structure characterized by a single purchaser is termed a_____________.
