Class notes

Hurley Ch1,2,3, and 4 on 2 hour reserve in the Kings library, and Bhattacharya Ch 1, 2, and 3 also on reserve in library

1. Which statement best describes the demand for health care

A. the demand for health care is similar to the demand for other services

B. the demand for health care is derived from the demand for health

C. the demand for health care is jointly determined with health

D. the demand for health care is independent of income

2. A representation of society's preferences and attitudes towards the amount and distribution of welfare in a society is called

A. A utility function

B. A social welfare function

C. The Grand Utility Frontier

D. The Edgeworth Box

Short answer questions.

1. Health expenditures have been rising since 1970. True or False: The main reasons for rising health expenditures is rising prices for health care. Explain.

2. Many studies estimate that about twenty to twenty-five precent of health care spending is wasteful. Describe wasteful health care spending.

3. True or false. All production points on the production possibility frontier are allocatively efficient. Explain.

4. Suppose a good has a negative production externality. Draw the graph. True or false: The deadweight loss in a market will be higher when demand is more inelastic. Explain.

5. Based on the hypothetical information in the chart below relating to rates of surgery in Canada:

a. Is there horizontal equity in the utilization of health care in Canada between Toronto and Vancouver? Explain.

b. Is there vertical equity in the utilization of health care in Ontario between Toronto and Vancouver? Explain.

6. True or False. An unequal distribution of the good among members of society can may be equitable if some groups have higher need. Explain.

7. (Bhattacharya Ch2) Preventative care refers to care taken to prevent future diseases rather than to treat current ones. Would you expect preventative care to be less price elastic than inpatient care? Explain.

8. Bhattacharya Ch2) Suppose you are collecting data from a country like Japan where the government sets the price of health care. Each prefecture in Japan has a different set of prices (for example, Tokyo has higher prices than rural Hokkaido). Data for 1999 are displayed in Table 2.12.