Health Care DemandAn individual's demand for physician office visits in a given year is given by, Q = 11-0.045P, where Q is the number of office visitsand P is the out-of-pocket price paid by the individual for each visit. Assume the market price of an office visit is $180.Use this information to answer the questions below.Questions:1. Without insurance, how many office visits will the individual make in one year?NOTE: Enter a formula to calculate the number of visits, rounding your answer to the nearest whole number.2. Suppose the individual has insurance and pays only a $40 copayment for each visit.How many office visits will the individual make in one year?NOTE: Again, enter a formula, rounding your answer to the nearest whole number.3. What is the moral hazard and deadweight loss (DWL) associated with having insurance?NOTE: Enter formulas in the respective boxes below.Moral Hazard:DWL:4. Based on the Nyman model, suppose the value the individual places on each visit increases by $50 when the individual is ill and has insurance.a. In the box below, write the general expression for the inverse demand equation, accounting for the increased value of insurance for the individual.NOTE: If necessary, round terms in the equation to the nearest whole number (for instance, P= 174.6-12.45Q should be expressed as: P=175-120).b. What value of Q (i.e. number of visits) represents the dividing line between welfare-increasing and welfare-decreasing moral hazard?Note: Enter a formula using the inverse equation above (4a.). Round answer to the nearest whole number.

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An individual's demand for physician office visits in a given year is given by, Q=11-0.045P, where Q is th and P is the out-of-pocket price paid by the individual for each visit. Assume the market price of an office Use this information to answer the questions below. Questions: 1. Without insurance, how many office visits will the individual make in one year? NOTE: Enter a formula to calculate the number of visits, rounding your answer to the neares

An individual's demand for physician office visits in a given year is given by, Q=11-0.045P, where Q is th and P is the out-of-pocket price paid by the individual for each visit. Assume the market price of an office Use this information to answer the questions below. Questions: 1. Without insurance, how many office visits will the individual make in one year? NOTE: Enter a formula to calculate the number of visits, rounding your answer to the neares

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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