The figure shows the market for auto insurance.Progressive Auto Insurance offers applicants to temporarilyinstall its Snapshot device to monitor driving habits prior tosigning up for insurance. This practice should result inpaying a premium ofPremium (dollars per year)MCRiskyper year.900O A. 100 million safe drivers; $900700B. 120 million safe drivers; $700MCsafeC. 80 million unsafe drivers; $900500D. 100 million drivers; $700O E. 80 million safe drivers; $500100120Policies (millions)80O O O

Premium (dollars per year) The figure shows the market for auto insurance. Progressive Auto Insurance offers applicants to temporarily install its Snapshot device to monitor driving habits prior to signing up for insurance. This practice should result in paying a premium of MCRisky per year. 900 O A. 100 million safe drivers; $900 700 B. 120 million safe drivers; $700 MCSaf C. 80 million unsafe drivers; $900 500 D. 100 million drivers; $700 D. O E. 80 million safe drivers; $500 80 100 120

Premium (dollars per year) The figure shows the market for auto insurance. Progressive Auto Insurance offers applicants to temporarily install its Snapshot device to monitor driving habits prior to signing up for insurance. This practice should result in paying a premium of MCRisky per year. 900 O A. 100 million safe drivers; $900 700 B. 120 million safe drivers; $700 MCSaf C. 80 million unsafe drivers; $900 500 D. 100 million drivers; $700 D. O E. 80 million safe drivers; $500 80 100 120

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Adverse selection arises in the market for health insurance because Moral hazard arises in the market for health insurance because OA. for many people, the price of health insurance is beyond their ability to pay for it; the marginal social benefit of healthcare exceeds the marginal benefit perceived by its consumers OB. people optimistically underestimate the health risks that they face; people take too short a view of the benefits of healthcare OC. O D. some of the healthiest people choose to not buy insurance; once insured, a person has less incentive to adopt a healthy lifestyle once insured, a person has less incentive to adopt a healthy lifestyle; some of the healthiest people choose to not buy insurance;
9. Consider the following hypothetical three-stage screening test for a cancer with the following rates of detection and costs: Stage 2 3 Number of Cases Detected 100 110 125 135 Total $150,000 $180,000 $250.000 $310.000 A. Calculate the average cost per cancer detected in the three stages. B. Calculate the marginal cost per cancer detected in the three stages. C. Suppose that the marginal benefit per treated case is $4,600 per person. What would be the optimal screening, given the costs?
PRINCIPLE OF HEALTHCARE FINANCE
1. Using three (3) illustrations, explain the concepts of disparities in health determinants and health outcomes. 2. In economics, efficiency is a critical concept in assessing the most effective utilization of resources. Discuss three types of economic efficiencies. Can efficiency reduce disparities in health determinants and health outcomes? If so, how? 3. Beyond efficiency, discuss four (4) ways the concepts of ethics and equity are applied to address health disparities.
John is a 55-year-old male smoker, about 50 pounds overweight, who has high blood sugar and drinks to excess. Because of adverse selection in health insurance, Select one: O a. when John gets health insurance, he will be less likely to take care of himself. O b. if John doesn't have health insurance already, he will not be able to get it. O c. when John gets health insurance, he will be more likely to take care of himself. O d. John is more likely to buy health insurance than the average person since premiums are based on the average risk. O e. John is less likely to buy health insurance than the average personsince premiums are based on the average risk.