The following table gives the demand curve for doctor visits for Ashlee. If the price of a doctor's visit is $600, and Ashlee does not have health insurance, she will visit the doctor times. If Ashlee obtains 80% coinsurance (the company pays 20% of the medical bill, Ashlee pays 80% of the medical visit), then Ashlee will visit the doctor times. Price of visit Number of visits $600 0
The following table gives the demand curve for doctor visits for Ashlee. If the price of a doctor's visit is $600, and Ashlee does not have health insurance, she will visit the doctor times. If Ashlee obtains 80% coinsurance (the company pays 20% of the medical bill, Ashlee pays 80% of the medical visit), then Ashlee will visit the doctor times. Price of visit Number of visits $600 0
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Can you answer both parts to this question please? I am so confused. Thank you.
Transcribed Image Text:The following table gives the demand curve for doctor visits for Ashlee. If the price of a doctor's visit is $600, and
Ashlee does not have health insurance, she will visit the doctor_times. If Ashlee obtains 80% coinsurance (the
company pays 20% of the medical bill, Ashlee pays 80% of the medical visit), then Ashlee will visit the doctor
times.
Price of visit Number of visits
$600
$550
$500
$450
$400
1;2
0; 2
0; 4
2; 1
1:4
0
1
12
3
14
Transcribed Image Text:The table shows the utility Tia receives at various income levels, but she does not know what her income will be next
year. There is a 10% chance her income will be $20,000, a 30% chance her income will be $30,000, and a 60% chance
her income will be $40,000. We know that Tia is risk-averse because:
Table: Utility and Income Levels for Tamara
Income Level
Utility Level (utils)
$20,000
2,500
25,000
26,516
28,000
29,000
30,000
3,000
3,144
31,000
35,000
40,000
3,270
3.350
3,420
3,480
3,680
3,880
her expected income is less than what she may actually earn.
she would prefer $40,000, but there is a risk she will make only $20,000.
she experiences diminishing marginal utility of income.
her expected income is more than what she may actually earn.
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