Business Principal Agents

QUESTION 1

1. Which of the following are examples of the principal-agent problem?

   		Insurance companies aren't always fully aware of a patient's family history.
   		Patients with insurance eat unhealthier foods than those without insurance.
   		Patients are unfamiliar with their doctor's medical training.
   		Doctors are unaware of the level of a patient's drug use.
   		Consumers don't know the full cost of health care.
   		Consumers trust that doctors are ordering only relevant procedures.

11.25 points   

QUESTION 2

1. Restrictions on medical workers ___________ the supply compared with a market without such restrictions. Adding the restrictions will ___________ the equilibrium wage and will ___________ the equilibrium quantity.

   		increase; decrease; increase
   		decrease; increase; decrease
   		decrease; increase; increase
   		decrease; decrease; decrease

11.25 points   

QUESTION 3

1. Which of the following medical services has relatively elastic demand?

   		teeth whitening at the dentist
   		treating an infant with a bad cough and high fever
   		an MRI following a possible concussion
   		a routine physical exam after the age of 40

11.25 points   

QUESTION 4

1. Suppose you and your twin have different insurance plans. Your insurance plan has a fixed co-pay of $40 for each doctor's visit, but your twin's co-pay is 20% of the total cost. The local dentist charges $150 for a cleaning. Which of the following is most likely true?

   		You will visit the dentist more.
   		Your twin will visit the dentist more.
   		You and your twin will visit the dentist the same number of times.

11.25 points   

QUESTION 5

1. Which of the following can explain part of the reason for the recent increased costs in the healthcare industry? Select all that apply.

   		Restrictions on healthcare supply have made it more inelastic.
   		The demand for health care has become more elastic.
   		There are more providers of health care in the industry.
   		Incomes for families have decreased as a result of the most recent recession.
   		There has been an increase in the number of people using Medicare and Medicaid.
   		The demand for emergency care has become more inelastic.

11.25 points   

QUESTION 6

1. Which of the following are examples of adverse selection? Select all that apply.

   		Insurance companies aren't always fully aware of a patient's family history.
   		Patients without insurance eat unhealthier foods than those with insurance.
   		Patients are unfamiliar with their doctor's medical training.
   		Doctors are unaware of the level of a patient's drug use.
   		Consumers don't know the full cost of health care.
   		Consumers trust that doctors are ordering only relevant procedures.

11.25 points   

QUESTION 7

1. Which of the following factors reduces the supply of medical workers? Select all that apply.

   		extensive training at medical facilities after graduation
   		additional education beyond a bachelor's degree
   		certification from a state authority
   		reciprocity of licenses between states

11.25 points   

QUESTION 8

1. The National Organ Transplant Act of 1984 makes it illegal for people to buy or sell a human organ. Which of the following actions could incentivize people to donate a kidney? Select all that apply.

   		Require extensive health exams before people are able to donate.
   		Increase the penalties associated with black market transactions.
   		Issue scholarships to donors.
   		Allow tax deductions for donating an organ.

11.25 points   

QUESTION 9

1. Currently, the United States has outlawed the sale of organs, which results in a large shortage of available organs for patients in need. Which of the following actions could reduce the shortage of organs? Select all that apply.

   		Levy a tax on people currently wanting to donate kidneys.
   		Allow organs to be sold, but for no more than $1,000.
   		Allow organs to be sold in a competitive market.
   		Allow organs to be sold, but for no less than $500.
   		Increase the penalties for patients selling organs.
   		Develop an alternative synthetic kidney.