Chapter 5 Complete Test Bank The Role of Government

Dewar ASQZ

Chapter 5

True/False

1. Individuals are rationally ignorant about the wealth implications of government activities because the cost of acquiring such information is high and the private benefit is low.

<Answer: True>

<Complexity: Easy>

<A-head: Theories of Government Intervention>

<Subject: Chapter 5, Page 34>

Multiple Response

2. The government can promote efficiency and equity in which of the following manners?

[1] Providing public goods

[2] Easing regulations

[3] Promoting externalities

[4] Enforcing antitrust laws

[5] Levying taxes

<Answer: 1, 4, 5>

<Complexity: Difficult>

<A-head: Forms of Government Intervention>

<Subject: Chapter 5, Page 34>

Multiple Choice

3. Which piece of legislation prohibits independent physicians from discussing their pricing policies to prevent monopolistic practices such as price fixing?

[1] Affordable Care Act

[2] Sherman Antitrust Act

[3] Health Insurance Portability and Accountability Act

[4] Medicare Improvement for Patients and Providers Act

<Answer: 2>

<Complexity: Moderate>

<A-head: Forms of Government Intervention>

<Subject: Chapter 5, Page 34>

Multiple Choice

4. Which of the following programs are generally funded by mandatory contributions through some form of taxation?

[1] Social insurance

[2] Public insurance

[3] Group insurance

[4] Private insurance

<Answer: 1>

<Complexity: Moderate>

<A-head: Forms of Government Intervention>

<Subject: Chapter 5, Page 35>

Multiple Choice

5. One growing concern for the protection of public goods is the regulation of which of the following?

[1] Vaccinations

[2] Experimental medications

[3] Health information technology

[4] Durable medical equipment

<Answer: 3>

<Complexity: Moderate>

<A-head: Forms of Government Intervention>

<Subject: Chapter 5, Page 35>

Multiple Choice

6. Another major issue in data security that requires government oversight is the use of which of the following in the storage of medical records?

[1] Wireless technology

[2] Cloud computing

[3] Internet usage

[4] Data encryption

<Answer: 2>

<Complexity: Difficult>

<A-head: Forms of Government Intervention>

<Subject: Chapter 5, Page 36>

Multiple Response

7. Which theories describe the motivation behind government intervention in the healthcare market?

[1] Public interest group theory

[2] Private interest group theory

[3] Special interest group theory

[4] Foreign interest group theory

<Answer: 1, 3>

<Complexity: Difficult>

<A-head: Theories of Government Intervention>

<Subject: Chapter 5, Page 33>

True/False

8. The special interest theory states that the government intervenes in the best interests of society to promote efficiency and equity in the market.

<Answer: False>

<Complexity: Easy>

<A-head: Theories of Government Intervention>

<Subject: Chapter 5, Page 33>

True/False

9. The special interest theory states that the political venue can be treated like any private market for goods and services so that amounts and types of legislation are determined by supply and demand for such legislation.

<Answer: True>

<Complexity: Easy>

<A-head: Theories of Government Intervention>

<Subject: Chapter 5, Page 33>

Multiple Choice

10. Economists, as well as courts dealing with antitrust cases, often use which concept to measure whether a firm has monopoly power in supplying a good or service in the given market?

[1] Cross-price elasticity of demand

[2] Cross-price elasticity of supply

[3] Vertical price elasticity of demand

[4] Vertical price elasticity of supply

<Answer: 1>

<Complexity: Moderate>

<A-head: Forms of Government Intervention>

<Subject: Chapter 5, Page 34>