1. The dominant factor affecting medical care delivery and finance in the 1990s was

a) the Hill-Burton Act.

b) prospective payment for hospitals.

c) creation of Medicare and Medicaid.

d) the explosive growth of managed care.

e) ERISA.

2. What is the most important factor leading to rising health care costs in the United States since 1980?

a) The increased use of expensive medical technology.

b) The aging U.S. population.

c) The increased cost of malpractice insurance for providers.

d) Rising incomes for physicians.

e) The rising cost of pharmaceutical drugs.

3. Rent-seeking behavior results in

a) increased economic activity by promoting efficiency.

b) lower economic activity by diverting resource to less-productive uses.

c) a more equitable distribution of income and wealth.

d) lower prices throughout the economy.

e) greater income and wealth in the private sector.

4. Of the new drugs introduced in the United States between 1940 and 1990, what percentage were discovered by U.S. firms?

a) 15.

b) 30.

c) 45.

d) 60.

d) 75.

5. Pharmaceutical companies receive patents as an exclusive right to produce a drug. This results in

a) normal profits on the patented drug.

b) monopoly status in the production of the drug.

c) lower prices for patients requiring the drug.

d) orphan drug status.

e) fewer new chemical compounds discovered.

6. How would moving from an income to a consumption tax affect the level of savings in a nation? What effect would this have on the level of investment?