This document contains a compilation of practice test for the HEALTH ECONOMICS board exam. This prep exam questions will improve your knowledge and understanding on HEALTH ECONOMICS topics.
The world's population is aging because of rising life expectancy and failing fertility rate.
- True
To address health care costs of an aging population developed nations have adopted
various forms of financing schemes that involve large-scale money transfers from
younger populations to older populations. - True
Although people are now living longer, their QOL has not improved because they are
living longer with disability. This phenomenon is referred to as "compression of
morbidity" - False
A rise in health care expenditures is not always a bad result - True
Competing risk is a challenge of chronic disease prevention programs - True
Advance directives have led to greater health care cost savings than palliative/EOL care
- False
The theory that best explains the data observed worldwide regarding obesity trends is -
decreasing price of food
Costs related to obesity - higher health care costs, lower wages, reduced life
expectancy
If obese people can enter the same risk pool as normal weight people this creates moral
hazard for obesity that leads to social loss - True
The RAND HIE found that more generous health insurance was correlated with body
mass index (obesity) - False
Rationality under uncertainty has all of the following characteristics - transitivity,
independence, completeness
Expected utility theory demonstrates that people behave in a rational manner whereas
prospect theory explains ways in which people behave irrationally - False
Kahneman and Tversky showed that discrepancies in the expected utility theory may be
due to: - framing, overvaluing certainty, and overvaluing small probabilities.
Loss aversion helps explain why people are risk-averse when it comes to gains and
risk-seeking with respect to losses. - True
, People treat gains and losses the same; this is known as the endownment effect - False
How utilities are evaluated depends on the reference point one is starting from - True
Prospect theory consists of two stages: editing and evaluation - True
Expected utility theory is better than prospect theory in explaining demand for health
insurance observed in the RAND HIE. - False
An opt-out section for health care savings accounts have been shown to have a higher
participation rate than an opt-in option. This is an example of intervention nudge
suggested by prospect theory - True
Prospect theory explains why utility scores derived by the standard gamble method is
problematic while scores derived via the time trade-off method are not - False
The externality that a market transaction has on others can be positive or negative -
True
When a COVID-19 vaccine becomes available, people should be incentivized or
subsidized to get inoculated because the social benefits of the vaccine are greater than
the private benefits. - True
Because externalities are naturally occurring in the marketplace, government policy
cannot achieve a social optimum - False
Economist Ronald Coase showed that markets can achieve a socially optimal outcome
on its own, even when there are externalities. The only requirement of Coase's
Theorem to achieve maximum social welfare is that the transaction or bargaining costs
are low. - False
Because transaction costs are often too high, Pigouvian taxes or subsidies are a
justifiable alternative solution - True
Private organ transplant transactions are not allowed because of: - equity, immorality,
and repugnance
Even with transferable organ property rights, the Coase Theorem fails because property
rights are still not well defined. - True
One way governments have shortened wait lists is by subsidizing people to become
organ donors. this has been a successful strategy because this creates a financial
incentives with no unintended consequences. - False
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