Midterm_08_answers_post - Answer Key for PAM 435 Midterm...

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Answer Key for PAM 435 Midterm Exam March 13, 2008 I. True/False: CIRCLE the correct answer [3 points each, for a total of 12] 1) True False Between 1960 and 2000, more than 50% of the increase in real (i.e., inflation-adjusted) income in the United States was allocated to medical care. 2) True False A female newborn in the United States had a higher probability of dying during the next year in 2005 than a 50 year-old female. 3) True False A majority of the uninsured in the U.S. live in a household with a full- time employed worker. 4) True False A majority of people with a household income under the federal poverty level in the U.S. are covered by Medicaid. II. Multiple Choice: CIRCLE the correct answer or FILL IN the blank [4 points each, for a total of 12] 5) During which of the following decades did medical spending per person in the U.S. grow by the smallest amount in real, or inflation-adjusted, terms? a. 1960s b. 1970s c. 1980s d. 1990s
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6) Place these four types of medical services in order according to the amount spent on each in the United States in 2006: hospital care; dental care; physician services; prescription drugs . Greatest expenditure: _________Hospitals________ 2 nd largest: _________Physicians_______ 3 rd largest: _________Prescription Drugs_ Least expenditure: _________Dental care_______ 7) Rank the following age groups in the United States, from the most likely to be uninsured to the least likely: 21 to 24 year-olds; 45 to 54 year-olds; people 65 and older . Most likely to be un insured: ____21-24 year-old____________ 2 nd most likely: ____45 – 54 year-old___________ Least likely to be un insured: ____65+_____________________ III. Short Answer [7 points each, for a total of 49] 8) Briefly describe two different methods economists have used to estimate the value of a life. a) Expected lifetime earnings: the amount of money a person is expected to earn over the remainder of his/her lifetime, discounted back to today (no need to mention discounting). b) Occupational choices: based on the tradeoffs workers make between the risk of dying on the job and the wage or salary of the job. That is, how much extra a worker must be paid to expose himself/herself to a slightly higher chance of dying. c) Value of time trade-offs: for example, the trade-off between the value of time saved by driving fast versus the slightly higher risk of dying when one drives fast. d) Spending on safety devices: the amount of money people spend on devices like smoke alarms or air bags versus the slightly lower probability of dying when one has those devices. e)
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Midterm_08_answers_post - Answer Key for PAM 435 Midterm...

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