PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
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Chapter 10, Problem 5RQ
To determine
Explain velocity and determine how the introduction of new payment technologies affected velocity.
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The table below shows pizza topping preferences for Marcus, Dakota, and Austin, and that each individual has strictly transitive preferences. Suppose that three individuals
make up our "society." In this society, prefer pepperoni to cheese pizza; _prefer cheese to supreme; and prefer supreme to pepperoni. This example illustrates that
_
Person
Marcus
Dakota
Austin
0000
First Preference
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Second Preference
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two-thirds; two-thirds; two-thirds; even if individuals' preferences might satisfy the transitive property, societal preferences may not.
two-thirds; two-thirds; everyone; if individuals' preferences satisfy the transitive property, societal preferences must also.
two-thirds; two-thirds; everyone; even if individuals' preferences might satisfy the transitive property, societal preferences may not.
two-thirds; two-thirds; two-thirds; if individuals' preferences satisfy the transitive property,…
Consider the table below, which has data on insurance status and medical expenditures for different types of professors at Hypothetical University (HU), economics &
criminology professors. Assume that there are an equal number of economics and criminology professors. Assume further that econ professors all have the same level of health
and criminology professors all have the same level of health.
In 2020, every professor was offered a full insurance contract with no premium. In 2021, HU charged any employee who wanted to keep health insurance the actuarially fair
premium based on 2020 expenditures. This premium would be equal to and, as a result,professors dropped their coverage in 2021.
_
2020
2021
Insured? Avg. Expenditures Insured? Avg. Expenditures
Economics Professors
Criminology Professors Yes
Yes $25,000
$15,000
000000
$15,000; criminology
$25,000; econ
$20,000; econ
$15,000; econ
$20,000; criminology
$25,000; criminology
???
$28,000
???
$10,000
Consider the table below, which has data on insurance status and medical expenditures for different types of professors at Hypothetical University (HU), economics &
criminology professors. Assume that there are an equal number of economics and criminology professors. Assume further that econ professors all have the same level of health
and criminology professors all have the same level of health.
There is evidence of
2021
Insured? Avg. Expenditures Insured? Avg. Expenditures
2020
Economics Professors
Criminology Professors Yes.
Yes
$25,000
$15,000
0000
???
???
$28,000
$10,000
I. moral hazard because in 2021 criminology professors dropped their coverage and health expenditures went down.
II. adverse selection because in response to rising premiums after 2020, the professors with lower health expenditure dropped coverage
Both I and II
neither I nor II
Chapter 10 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
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- 0000 Health Suppose that you graph nations' health expenditures against income and see that the US's point lies below others (like in the stylized figure below). From the graph below, it appears that the US is However, this may not be the case if_ Switzerland UK US HPF Health expenditures productively inefficient; The US has a population that prefers spending their resources on health productively efficient; The US has a population that prefers spending their resources on health productively efficient; The US has lower levels of inherent health, therefore it has its own HPF which is lower than the others. productively inefficient; The US has lower levels of inherent health, therefore it has its own HPF which is lower than the others.arrow_forwardPlease match the definition to the term that best fits. This occurs when less-risky people are more likely to enroll in health insurance. How much spent out-of-pocket before insurance kicks-in. When no more units of a good can be produced without decreasing the amount of another good or service The amount that the insurance company pays the customer when an insured event occurs. When an individuals income is state independent Behavior changes that occur before an insured event happens and make that event more likely to occur. The fraction of the medical bill that the consumer is responsible for. The fixed amount that is paid for a service at the time service is rendered. This occurs when marginal benefit of a good to a consumer is equal to marginal cost of production Behavior changes that occur after an insured event happens and make recovering from that event more expensive. Monthly fee to enroll in insurance The oversupply of low-quality goods, products, or contracts that results…arrow_forwardfor the 2nd part the last option got cut off, there is also a none of the above choice tooarrow_forward
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