The marginal cost of health insurance is a constant $8,000 a year and the figure shows the marginal benefit and willingness and ability to pay curve. Suppose that the marginal social benefit from insurance exceeds the willingness and ability to pay by a constant $2,000 per family per year. If the government decides to subsidize health insurance (like Obamacare), what subsidy will achieve the efficient coverage? The total subsidy that achieves the efficient coverage is $ billion. 12- 10- 8- 2- 0 Premium (thousands of dollars per year) 10 20 30 40 50 Quantity (millions of families insured) D=MB 으 60

The marginal cost of health insurance is a constant $8,000 a year and the figure shows the marginal benefit and willingness and ability to pay curve. Suppose that the marginal social benefit from insurance exceeds the willingness and ability to pay by a constant $2,000 per family per year. If the government decides to subsidize health insurance (like Obamacare), what subsidy will achieve the efficient coverage? The total subsidy that achieves the efficient coverage is $ billion. 12- 10- 8- 2- 0 Premium (thousands of dollars per year) 10 20 30 40 50 Quantity (millions of families insured) D=MB 으 60

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

1. An article in the Economist observes: "Insurance companies often suspect the only people who buy insurance are the ones most likely to collect." What do economists call the problem that is described in the article? If insurance companies are correct in their suspicion, what are the consequences for the market for insurance? Use health insurance as an example.
Which of the following stalements is CORRECT about Medicare? A.Il is a medical assistance program B.Il is a hospital and medical expense insurance program. C.It provides benefis o lotally disabled persons only D.Its Part A provides payment for physicians' bills.
Assume that health insurance is private in a country, and the market for insurance is competitive. The figure below shows the marginal benefit and willingness and ability to pay curve. Premium (thousands of dollars per year) $160 billion. $80 billion. $160 million. $80 million. 12 10 8 606 4 2 0 D = MB 10 20 30 40 50 Quantity (millions of families insured) Suppose that the marginal social benefit of insurance exceeds the willingness and ability to pay by a constant $2,000 per family per year. Suppose the marginal cost of health insurance is a constant $8,000 a year. If the government decides to provide public health insurance, how much will taxpayers have to pay?
8. Agreement and disagreement among economists Suppose that Dmitri, an economist from a research institute in Texas, and Frances, an economist from a university in Massachusetts, are arguing over health Insurance. The following dialogue shows an excerpt from their debate: Frances: A popular topic for debate among politicians as well as economists is the idea of providing government assistance for health benefits. Dmitri: I think it is oppressive for the government to tax people who take care of themselves in order to pay for health insurance for those who are obese. Frances: I disagree. I think government funding of health insurance is useful to ensure basic fairness. The disagreement between these economists is most likely due to * Despite their differences, with which proposition are two economists chosen at random most likely to agree? Employers should not be restricted from outsourcing work to foreign nations. Business managers can raise profit more easily by reducing costs than by…
Draw a market where consumers demand health insurance and insurance companies supply insurance at a price of insurance called the premium. Explain why, in this model of the insurance market, the individual mandate (the mandate is everyone has to have insurance) will cause health insurance premiums to increase.
Compare the market for baby products and the market for childbirth (via either vaginal delivery or cesarean section procedure), then discuss the concept of ‘Agreement of Trade’ in both markets. Using illustrations, briefly explain how the following economic concepts find significance in understanding the market for health and health care: Scarcity, Choice and Opportunity Cost Efficiency and Equity Benefit-Cost Principle
Suppose that Hubert, an economist from an AM talk radio program, and Kate, an economist from a school of industrial relations, are arguing over health insurance. The following dialogue shows an excerpt from their debate: Kate: A popular topic for debate among politicians as well as economists is the idea of providing government assistance for health benefits. Hubert: I think it is oppressive for the government to tax people who take care of themselves in order to pay for health insurance for those who are obese. Kate: I disagree. I think government funding of health insurance is useful to ensure basic fairness. The disagreement between these economists is most likely due to (DIFFERENCE IN SCIENTIFIC JUDGEMENT, DIFFERENCE IN VALUES, DIFFERENCE BETWEEN PERCEPTION VERSUS REALITY) . Despite their differences, with which proposition are two economists chosen at random most likely to agree? A. Employers should not be restricted from outsourcing work to foreign nations.…
Ronald Coase in his classic October 1960 article “The Problem of Social Cost” (Journal of Law and Economics 3[1], pp.1-4) discussed collective ownership of resources. Collective ownership often means that no one takes care of resources, or at minimum that resources are not cared for as well as if they were privately owned. What are some of problems with collective ownership in the health care industry? Can you think of some examples in which collective ownership works? In what situations does it not work?
Suppose you have an insurance plan in which you pay the market price for medical care until you meet a deductible of $1,000, after which you have a coinsurance rate of .20. Answer parts a and b assuming your inverse demand curve for medical care is P = 400 – 10Q and the market price for medical care is $200 per unit.a) Graph the price line and your demand curve. On the graph, label the values of the x and y intercepts of the demand curve, the quantity where you meet the deductible, the horizontal sections of the price line, and the point(s) where the demand curve intersects the price line.b) Find the number of units of medical care that you will demand. Show all calculations that youperformed in your analysis.