Reference Book: Health Economics by Jay Bhattacharya, Timothy Hyde& Peter Tu PAR

Question

Reference Book: Health Economics by Jay Bhattacharya, Timothy Hyde& Peter Tu PART 2: TRUE-FALSE (4 pts each): Please indicate whether the statement is true or false. Explain your reasoning for your answer (in 2-3 sentences if possible). Right answer without an explanation will receive only 1 out of 4 points. reduce hospital admissions through better outpatient care T/F. Why? hospital service is the most lucrative one. T/F? Why? increases quality when prices are set administratively. T/F Why? 7. If inpatient and outpatient care are substitutes, then health insurance availability could 8. Generally, hospitals competing to attract emergency room patients since this type of 9. A risk averse and rational individual choose full coverage if insurance is fair. T/F? Why? 10. The literature on the effect of competition on hospital quality indicates: competition 11. In health insurance markets asymmetric information between agents leads to adverse selection. T/F? With an example, explain how asymmetric information in health insurance context does or does not lead to adverse selection. 12. Universal health insurance coverage solves adverse selection problem. T/F? Why? 13. Assuming health problems can emerge at any age, private markets can solve adverse selection problem. T/F? Why? 14. Without an individual mandate, non-group insurance market (Health insurance marketplace) has greater chance to experience an adverse selection death spiral. T/F? Why? 15. Advantageous selection can be one of the reasons of why we do not observe moral hazard in health insurance markets. T/F? Why? 16. So far, researchers observed predictions of asymmetric information models in all types of in urance markets. T/F? Why? air and partial insurance is more preferable as it maximizes risk averse individual's 17. A f utility and decreases overall healthcare costs in the society. T/F? Why? In a pooling equilibrium, the insurance company offers two contracts that results in high-risk and low risk types choose different contracts. T/F? Why? 21. Economists explain desire to reduce uncertainty by diminishing marginal utility fronm income. the property of diminishing marginal utility. Show how economists explain risk averse behavior using diminishing marginal utility the graph

Explanation / Answer

11. in health insurance markets asymmetric information between agents leads to adverse selection. True

In the Healthcare Insurance, there is probability that agents select wrong people as they do not have full information.

12.Universal health insurnce solves  adverse selection. True

because now everyone is covered. There is no wrong person selected.

13. assuming health problems occur at old age can solve  adverse selection problem. Hnece, false

14.True

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