Understanding Health Care Economics: Key Concepts and Quiz
School
McMaster University**We aren't endorsed by this school
Course
ECONOMICS 2B03
Subject
Economics
Date
Dec 11, 2024
Pages
11
Uploaded by ElderCapybaraPerson642
Quiz QuestionsWhich of the following statements is false?In 2020 Women had higher life expectancy at birth in every OECD countryCanada spends a higher proportion of GDP on health care than the USAThe difference in life expectancy at age 30 for the highly educated relative to the less educated is greater for men than women in every OECD country other than the Netherlands (see slide 22 in Chapter 2) In 2020 Iceland had the lowest infant mortality rate in the OECD, while Canada had an infant mortality rate higher than GreeceWhich of the following is not required for distributional equity?knowledge of the characteristic of individuals (e.g., income, health status) judged relevant to assessing a fair distribution of the good;a definition of how the distribution of that characteristic among individuals corresponds to a fair distribution of the good among individualsPareto optimalityagreement regarding the thing (or "good") whose distribution is of equity concern Which of the following programs is technically inefficient?BCDA
Which of the below activities is part of the health system but is not part of the health care system?Mental Health CareIn-patient Hospital carePollution ManagementPhysician visitsWhich of the following elements is not part of the Canada Health Act?UniversalityPrivate InsuranceComprehensivenessPortabilityWhich of the following statements is false?In modern consumer theory the utility of a given consumption bundle needs to be interpersonally comparablePareto Efficient Allocations are a subset of productively efficient Allocations.The productively efficient methods of production are a subset of the Technically-Efficient methods of production.Allocative Efficiency requires that society produce and distribute goods and services in accord with the value that individuals place on those goods and services.In Canada between 2000-2019 the percentage of total health care expenditure financed publicly was approximately: 70%90%50%30%Which of the following is not an economic resource?Physical Capital
LandHuman CapitalMoney Which of the following is not required for Pareto Optimality?FairnessExchange EfficiencyProductive EfficiencyTechnical EfficiencyWhich province or terrority spent above the Canadian average on health care in 2021?British ColumbiaQuebecOntarioNunavuFor each statement below, indicate whether it is true or false and discuss why it is true or false.1. Insurance coverage likely has little impact on people’s use of needed health care services.True2. Reducing inequalities in health within the population should focus primarily on the distribution of health care.False3. Because it increases GDP, increased health care spending is a sign of a robust economy.False4. The variation in the design of health care systems is a sure sign of inefficiency.False5. The evolution of health care technologies causes the efficient design of a health care system to change over time. True
Made up questions: MC1. Which of the following is a feature of the Canada Health Act?○ A) Equality○ B) Portability○ C) Profitability○ D) Exclusivity Correct Answer: B2. Which type of care accounts for the largest share of Canadian health care expenditures?○ A) Mental health services○ B) Primary care○ C) Hospital care○ D) Preventive care Correct Answer: C3. Which of the following is an example of indirect health care funding?○ A) Income tax contributions to health care○ B) Employer-sponsored insurance○ C) Direct patient out-of-pocket payments○ D) Private donations to hospitals Correct Answer: A4. Which of the following principles is essential to ensure all Canadian residents are covered under public health insurance?○ A) Public Administration○ B) Universality○ C) Sustainability○ D) Accessibility Correct Answer: B5. What distinguishes health care as a unique economic good?○ A) It has unlimited supply.○ B) Consumption is always a matter of choice.○ C) It often involves significant externalities.○ D) Pricing is unaffected by demand. Correct Answer: C6. Which of the following is an example of a non-health care component of the health system?○ A) Dental checkups○ B) Pollution control measures○ C) Emergency room visits○ D) Vaccination programs Correct Answer: B7. What is one primary goal of a publicly funded health care system like Canada’s?○ A) To eliminate private health providers
○ B) To achieve equal health outcomes for all○ C) To improve accessibility to medically necessary services○ D) To centralize all health care decisions federally Correct Answer: C8. In 2021, which province spent the highest per capita on health care?○ A) British Columbia○ B) Nunavut○ C) Ontario○ D) Quebec Correct Answer: B9. What is the term for payment models where health care providers are paid a fixed fee per patient regardless of the number of services provided?○ A) Capitation○ B) Fee-for-service○ C) Bundled payments○ D) Salaried payments Correct Answer: A10. Which of the following is a key function of public health systems?○ A) Providing private insurance○ B) Conducting health promotion campaigns○ C) Managing private hospital budgets○ D) Creating profit incentives for providers Correct Answer: B11. What aspect of the Canada Health Act ensures residents moving between provinces retain health coverage?○ A) Universality○ B) Portability○ C) Public administration○ D) Accessibility Correct Answer: B12. Which of the following health services is most likely to be excluded from public health coverage in Canada?○ A) Heart surgery○ B) Physiotherapy for chronic back pain○ C) Prenatal care○ D) Emergency care following an accident Correct Answer: B13. Which of the following is considered a social determinant of health?○ A) Insurance premiums○ B) Access to MRI scans○ C) Income inequality○ D) Wait times for surgery Correct Answer: C14. Which of the following best defines “technical efficiency”?
○ A) Producing maximum output for given inputs○ B) Achieving optimal allocation of goods○ C) Minimizing equity disparities○ D) Enhancing consumer satisfaction Correct Answer: A15. What is a primary role of provincial governments in Canada’s health care system?○ A) Funding pharmaceutical research○ B) Administering insurance plans○ C) Negotiating private insurance rates○ D) Managing medical licensing across provinces Correct Answer: B16. Which of the following is NOT an essential feature of a publicly funded health care system?○ A) Efficiency○ B) Profit maximization○ C) Equity○ D) Accessibility Correct Answer: B17. Which principle of the Canada Health Act limits extra billing by physicians?○ A) Public Administration○ B) Accessibility○ C) Comprehensiveness○ D) Universality Correct Answer: B18. What was the primary reason for introducing the Canada Health Act?○ A) To reduce private insurance use○ B) To enforce a single-payer system○ C) To ensure universal access without direct charges○ D) To prioritize preventive health services Correct Answer: C19. Which sector accounts for the largest private health expenditures in Canada?○ A) Prescription medications○ B) Dental care○ C) Vision care○ D) Long-term care Correct Answer: B20. Which of the following health expenditures is NOT publicly funded in most provinces?○ A) Cancer treatment○ B) Emergency room visits○ C) Routine dental checkups○ D) Childbirth services Correct Answer: C
21. What is Pareto efficiency?○ A) Equal allocation of resources○ B) Maximizing utility for one individual without reducing another’s utility○ C) Minimizing waste in production○ D) Achieving technical efficiency in production Correct Answer: B22. Which of the following is NOT required for Pareto optimality?○ A) Equity○ B) Technical efficiency○ C) Productive efficiency○ D) Exchange efficiency Correct Answer: A23. What does a production possibilities frontier (PPF) illustrate?○ A) The maximum goods that can be produced given resources○ B) How efficiently markets allocate resources○ C) The distribution of income in society○ D) Optimal pricing of health services Correct Answer: A24. Allocative efficiency requires:○ A) Equal distribution of resources○ B) That goods are allocated based on consumer preferences○ C) That production minimizes costs○ D) That marginal cost exceeds marginal benefit Correct Answer: B25. What type of efficiency addresses resource use to maximize society’s well-being?○ A) Technical efficiency○ B) Productive efficiency○ C) Allocative efficiency○ D) Exchange efficiency Correct Answer: C26. What does the utility function represent in health economics?○ A) The cost of producing health services○ B) Consumer satisfaction from consuming goods○ C) The technical efficiency of a production process○ D) The market price of health care Correct Answer: B27. Which of the following best describes distributional equity?○ A) Ensuring the process of allocation is fair○ B) Allocating resources based on individual needs○ C) Equal distribution of goods to all individuals○ D) Achieving allocative efficiency in production Correct Answer: B
28. Which of the following is a reason for inequality in health resource distribution?○ A) Market demand for luxury goods○ B) Differences in individual health needs○ C) Equal distribution of resources○ D) Excess public funding Correct Answer: B29. What is the role of the grand utility possibilities frontier (GUPF)?○ A) To show all possible production options○ B) To illustrate the optimal utility trade-offs across society○ C) To maximize individual preferences○ D) To assess technical efficiency Correct Answer: B30. What is the purpose of the social welfare function (SWF) in health economics?● A) To estimate production possibilities● B) To evaluate societal preferences for resource allocation● C) To calculate technical efficiency● D) To ensure market competition Correct Answer: BWhich of the following is NOT a type of efficiency discussed in health economics?● A) Allocative efficiency● B) Exchange efficiency● C) Productivity efficiency● D) Technical efficiency Correct Answer: CWhat does the UPF (Utility Possibilities Frontier) illustrate?● A) The trade-off between the utilities of two individuals● B) The maximum output of goods and services● C) The efficiency of resource production● D) The cost of achieving technical efficiency Correct Answer: AWhich of the following statements is FALSE regarding economic resources?● A) Money is considered an economic resource.● B) Human capital is an important economic resource.● C) Land is classified as a natural resource.● D) Physical capital includes tools and machinery. Correct Answer: AWhat principle does the Potential Pareto Criterion prioritize?● A) Equality of outcomes
● B) Overall societal gains● C) Maximizing individual preferences● D) Reducing marginal costs Correct Answer: BWhat does the term “exchange efficiency” imply?● A) Equal access to health care services● B) Resources allocated to those who value them most● C) Production at the lowest cost● D) Maximizing equity in distribution Correct Answer: BWhich of the following is a key feature of allocative efficiency?● A) Equal allocation of goods● B) Allocation that reflects societal preferences● C) Maximizing technical productivity● D) Reducing costs of production Correct Answer: BWhat does the concept of technical efficiency ensure?● A) Resources are allocated based on need● B) Goods are produced with no waste● C) Marginal cost equals marginal benefit● D) Resources are allocated equally among individuals Correct Answer: BWhich of the following is NOT a requirement for distributional equity?● A) Understanding individual needs● B) Assessing fairness in resource allocation● C) Maximizing technical efficiency● D) Knowledge of the characteristic being distributed Correct Answer: CWhich of the following policies aims to balance equity and efficiency?● A) Allocating resources based solely on economic output● B) Using public funding to address underserved areas● C) Privatizing all health services● D) Mandating equal health outcomes across populations Correct Answer: BWhat does a downward sloping PPF represent?
● A) Increasing costs of production● B) Trade-offs between two goods due to resource scarcity● C) Decreasing returns to scale● D) Absolute advantage in one good Correct Answer: BWhat is a major limitation of the social welfare function (SWF)?● A) It cannot assess trade-offs.● B) It requires interpersonal utility comparisons.● C) It ignores technical efficiency.● D) It does not consider resource scarcity. Correct Answer: BWhich of the following is an example of inefficiency in resource use?● A) Allocating resources to maximize marginal utility● B) Producing goods with higher costs than necessary● C) Distributing resources based on societal preferences● D) Achieving Pareto optimality Correct Answer: BWhat is the key distinction between equality and equity?● A) Equality focuses on process; equity focuses on outcome.● B) Equity considers individual needs; equality does not.● C) Equality ensures fairness; equity ensures uniformity.● D) Equity eliminates disparities; equality prioritizes efficiency. Correct Answer: BWhat does the term "productive efficiency" refer to?● A) Optimal allocation of resources based on preferences● B) Producing goods at the lowest cost● C) Equal distribution of goods and services● D) Maximizing consumer satisfaction Correct Answer: BWhat is a fundamental assumption in Pareto efficiency?● A) Individuals can exchange goods freely.● B) Society values equality over efficiency.● C) Utility is comparable across individuals.● D) Technical efficiency is not required. Correct Answer: A
Which of the following programs would NOT meet the criteria for Pareto optimality?● A) A program that benefits some while disadvantaging none● B) A program that increases utility for one at no cost to another● C) A program that redistributes resources but reduces total utility● D) A program that maintains total societal utility while redistributing it Correct Answer: CWhat is the role of the Grand Utility Possibilities Frontier (GUPF)?● A) It illustrates maximum utility at a single production point.● B) It combines all UPFs to find the best trade-offs across production points.● C) It ensures equality in utility distribution.● D) It measures technical efficiency in resource use. Correct Answer: BWhich of the following is an example of market failure in health care?● A) Perfect competition among providers● B) Equal distribution of health resources● C) Externalities affecting health outcomes● D) High technical efficiency in health production Correct Answer: CWhat key concept justifies policy intervention to correct inequities in health care?● A) Technical efficiency● B) Pareto criterion● C) Market failure● D) Allocative efficiency Correct Answer: C