One hypothesis for explaining the socio-economic disparities in health is known as the "direct income hypothesis." This theory states that health disparities arise because higher income individuals have more resources available to invest in health. In the context of the Grossman model, everything else held constant, we would expect For the higher-income individual to have a higher rate of health depreciation The Marginal efficiency of capital curve to be shifted inward (to the left) for the higher-income individual For the higher-income individual to have less productive time available. the PPF for the higher-income individual to be shifted outward compared to the lower-income individual

One hypothesis for explaining the socio-economic disparities in health is known as the "direct income hypothesis." This theory states that health disparities arise because higher income individuals have more resources available to invest in health. In the context of the Grossman model, everything else held constant, we would expect For the higher-income individual to have a higher rate of health depreciation The Marginal efficiency of capital curve to be shifted inward (to the left) for the higher-income individual For the higher-income individual to have less productive time available. the PPF for the higher-income individual to be shifted outward compared to the lower-income individual

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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