First Half of the Semester

Question 1

All else constant, an episode of illness leads to

Answer 1

A shift to the right in the demand for medical care

Question 2

Iron Triangle of healthcare

Answer 2

access, quality, and cost

Question 3

How much does healthcare constitute of GDP?

Answer 3

roughly 18% of GDP expenditure as of 2016, this accounts for 3.3 trillion dollars or roughly $10,500 per person.

Question 4

What are the 4 fundamental differences between healthcare and other kinds of markets

Answer 4

1) information asymmetry
2) externalities
3) uncertainty
4) government involvement

Question 5

How is medical CPI calculated

Answer 5

(PGAQGA)/(PGBQGB)

Question 6

Explain some hypotheses for the rising costs of healthcare

Answer 6

1) increase in prices
2) technology and technology overuse
2) increased demand for healthcare

Question 7

Compare and contrast normative and positive questions. What kind are economists able to answer?

Answer 7

Positive questions relate to what does happen, normative questions relate to what should happen. Economists can only answer positive questions.

Question 8

Describe the health production function

Answer 8

Dependent on multiple variables (degree of medical care (m), alongside diease (d), technology (t), lifestyle (l) etc.)

Question 9

Relate education to health outcomes

Answer 9

Education is generally related to lower obesity and reduced smoking. More highly educated people consume alcohol more regularly, but engage in less frequent binge drinking.

Question 10

Compare and contrast changes to the intensive and extensive margins

Answer 10

Changes to the intensive margin –> iterations of treatment, Changes to the extensive margin –> change in the # treated

Question 11

Define ICER

Answer 11

ICER is the incremental cost effectiveness ratio, used when one treatment is not dominant over the other.
(CA - CB) / (EA - EB)

Question 12

Does ICER make a determination about whether or not a particular treatment is worth it?

Answer 12

No, ICER does not. It’s just an empirical fact about the costs.

Question 13

Efficient Producer Hypothesis

Answer 13

Explanation for health disparities
Healthy individuals are more efficient producers of health.

Question 14

The Direct Income Hypothesis

Answer 14

Individuals with more income are able to allocate more resources to health, leading to a different health PPF. This leads to health disparities between high-income and low-income individuals.

Question 15

Income Inequality Hypothesis

Answer 15

Health disparities emerge due to income inequality, which is why more equal societies are healthier.

Question 16

Productive time hypothesis

Answer 16

Less healthy people have reduced time productivity and therefore earn less income

Question 17

Fuch’s Time Preference Hypothesis

Answer 17

Both health and socioeconomic status are dependent on the degree to which people are willing to delay gratification.

Question 18

A _______ discount rate and _____ discount factor are related to a willingness to delay gratification

Answer 18

low, high

Question 19

A ______ discount rate and ______ discount factor are related to an inability to delay gratification

Answer 19

high, low

Question 20

Recalling shifts along the demand curve vs shifts of the demand curve itself, what leads to shifts along the demand curve and what would shift the demand outward?

Answer 20

Changes in price lead to movements along the demand curve. Changes in other factors would lead to a shift in demand itself.