If E is the total medical expenditure, P is the price and Q is Quantity of medical care, total medical expenditure is:

If E is the total medical expenditure, P is the price and Q is Quantity of medical care, total medical expenditure is:

a. E= Q*Q

b. E = P*E

c. E = P*Q

d. E = P*P

2. Quanitity of medical care may increase due to the following reasons, except:

a. An aging population

b. inflation

c. Richer population

d. More insurance coverage

3. Rising costs is a bad thing

a. if rising costs are due to rising prices

b. if rising costs are due to rising demand

c. It is bad anyway

d. None of the above

4. In the last thirty years, Us Medical care CPI has been:

a. Consistently lower than the overall inflation

b. consistently Higher than the overall inflation

c. Constant

d. Fluctuating around the overall inflation

5. Based of Arrow’s impossibility theorem”

a. Highest level of health, wealth and equity are achievable at the same time.

b. Societies do not necessarily have transitive preferences, even when everyone in them does.

c. Achieving an equitable health system is impossible

d. Everyting is impossible.

6. Which one is an option for health insurance market?

a. Universal public insurnace

b. compulsory Insurance

c. Employer-Sponsored insurnace

d. All of the above

7. Which problem is not an issue in a universal public insurance

a Moral Hazard

b. Adverse Selection

c. Overutilization

d. None of the above

8. Which medical specialty is used the most frequently?

a. Neurosurgery

b. Cardiac

c. Emergency Room

d. Psychiatry

9. Which one is not a strategy used in managed care?

a. Gatekeeping

b, Denials of coverage

c. Group Discounting

d. Monitoring

10. Which theory does best explain the increasing trend in obesity in the past 150 years?

a. Decline in food prices

b. Changes in the food industry

c. Genetics

d. Increase in womens’s labor force participation




1. Option C is correct.

Expenditure incurred on any item is the price paid for the goods or services times the quantity purchased because this is the amount of money spent by an individual from his/her pocket.

2. Option B is correct.

Inflation is the rapid increase in the general price level in an economy. When there is inflation, the price of medical expenses would increase, and hence the quantity of medicare would fall due to the inverse relation between the price and the quantity.

3. Option A is correct.

Rising cost due to rising prices implies the persistence of inflation in the economy. And excess of inflation ruins the worth or value of money which hampers the growth of any economy.

4. Option B is correct.

The CPI for medicare has been on a rising trend than the overall inflation. Many reasons accrue to this trend, few being the increased demand for medicare, increased prices of drugs, etc.

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