lOMoARcPSD|4009572 Econ3510-topic 1-practicequestions Health Economics (York University) StuDocu is not sponsored or endorsed by any college or university Downloaded by ? ? (zovrk1968@gmail.com) lOMoARcPSD|4009572 Econ 3510 Health Economics: Topic 1: Introduction to Health Economics and the Canadian Health Care System Practice Questions There is not much testable material in topic 1. What there is, is covered below. Multiple Choice – Please choose the BEST answer (answers provided at the end of this document) 1. Which of the following ideas/topics cannot be used to explain the following statement: “Many people pass up free health care because the wait times and travel costs are too high”? a) b) c) d) Opportunity cost Rational decision making Health care financing Marginal analysis 2. Which of the following is not a valid example of how health care is different from most other economic goods? a) b) c) d) Prices do not influence demand Large presence of non-profit firms Presence and extent of uncertainty Role of equity and need 3. Which of the following is not a criterion of the Canada Health Act: a) b) c) d) Portability Accessibility Comprehensiveness Cost-effectiveness 1 Downloaded by ? ? (zovrk1968@gmail.com) lOMoARcPSD|4009572 TRUE and FALSE (Answers provided at the end of this document) 5. The criterion of “portability” under the Canada Health Act refers to the fact that the provincial health insurance plan must cover non-residents who are visiting the province. T F Why? False. The criterion of “portability” refers to the fact that the provincial health insurance plan must cover provincial residents, even when they are out‐of‐province. There is no principle that non-residents should be covered by a provincial health insurance plan. 6. In the view of economists “health” and “health care” are two different things. T F Why? True. “Health” is thought of in terms of health status which can range from good to poor. “Health” enters into people’s utility functions giving them happiness and letting them live longer, more productive lives. “Health care” is simply a good/service that people demand due to its effect on “health”. While “health care” may have a negative direct impact (few people like needles) it often has a positive indirect impact through its effect on “health”. 7. The decision of a patient to take 8 pills for treatment because the average benefit per pill is greater than the average cost per pill is an example of a consumer using marginal decision making. T F Why? False. This consumer of pills is apparently not using marginal decision making at all, he or she is making decisions based on average benefit and average cost. Marginal decision making in this context would require that each pill in succession is taken only if the marginal/additional benefit of taking the next pill is greater than the marginal/additional cost of taking the next pill. The consumer should stop taking pills when this condition no longer holds (that is, keep taking pills until the marginal benefit of another pill is less than or equal to the marginal cost). 2 Downloaded by ? ? (zovrk1968@gmail.com) lOMoARcPSD|4009572 8. The topic of health care funding deals with the various ways that revenues can be raised to pay for health care provision. T F Why? False. This topic is called health care “financing”, not “funding”. Two common examples of health care financing methods are the taxes used by public health care systems and the insurance premiums used by private health care systems. “Health care funding” entails providing health care organizations with the financial resources required to carry out their activities. 9. The provision of safe water and sanitation facilities provided by the state is part of health care system. T F Why? False. The provision of safe water and sanitation is part of ‘health systems.’ ‘Health care system’ includes goods (such as drugs) and services (especially provided by trained and licensed professionals) to maintain health. Multiple Choice Answers: 1(c), 2(a), 3(d) 3 Downloaded by ? ? (zovrk1968@gmail.com)