Online class Exercise two- Fall 2023 Essay & calculation (1)

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Jan 9, 2024

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Kai-Li Tsai, Ph.D. HCA 5623 Healthcare Economics Texas Woman’s University Exercise two (Economic Review) Fall, 2023 Due November 15, 2023 Short Essay/Calculation-Graphing Questions: 100% 1.(30%) Create a table to carefully compare the similarities and differences between cost-benefit analysis (CBA), cost effectiveness-analysis (CEA) and cost-utility-analysis (CUA) regarding their A) cost components, B) consequences, C) frequently used measurement units, D) calculation formula, E) limitations of design, F) strengths and weaknesses among these three designs. 2. (20%) Elasticity (related to Total Revenue): (Please show your steps & decision rules) The demand schedule for a specific computer software is as follows- Please use the relationship between Elasticity and TR (total revenue) to make judgment. (Does not need to calculate the elasticity for your decision: Reminder) Price (per copy of software) Quantity demanded (in million) $525 68 550 64 590 62 612 60 680 55 750 48 900 42 935 40 960 38 1010 36 a. What type of elasticity (elastic, inelastic, or others) is this demand if the price of this software increases from $550 to $900? (2%) explain why and show your steps. b. What type of elasticity (elastic, inelastic or others) is this demand if the price of this software decreases from $680 to $590? (2%) explain why and show your steps. c. At what price is total revenue a maximum and what quantity sold? 2% Show your calculation/numbers d. When the price increases from $680 to $960, is the demand for this software elastic or inelastic or others? Explain why. 2% e. When the price decreases from $680 to $935, is the demand for this software elastic or inelastic or others? Explain why. 2% 3. (10%) Determinants of Health What are determinants of health? Explain why medical care may not be the only Or most important factor that promote health. (Please refer to the Milton Romer s Determinants of Health Model)
Kai-Li Tsai, Ph.D. 4. Indifference Curve and Budget Line (20%) Annie has an income of $160 an hour. Popcorn costs $10 a bag, and costs $8 a six-pack of energy drink a. Draw a graph of Annie’s budget line with six-pack of energy drink on the x-axis , and popcorn on the y-axis. (4%) b. What is the slope of Annie’s budget line (2%)? What could this slope be also called? (2%) c. If we know that Annie maximizes her utility with the purchase of 10 bags of popcorn, how many six-pack energy drink she will purchase?-(an estimate from your graph & actual calculation) (5%), draw an indifference curve reflecting this optimum. (5%) 5. Income Effect & Substitution Effect (20%)- (still use budget line with energy drink on the x-axis , and popcorn on the y-axis). If Annie's hourly income remains $160. The price of energy drink is on sale and drops to $4 a six-pack of can energy drink, while the price of popcorn remains at $10 a bag. a. Draw the new budget line(s) (with energy drink on the x-axis, and popcorn on the y-axis) (5%) b. Use indifference curve to identify the change in quantity purchased (5%) c. and illustrate the income effects (points and distance) (10%) and substitution effects (points & distance) (5%)
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