Health Economics
Health Economics
14th Edition
ISBN: 9781137029966
Author: Jay Bhattacharya
Publisher: SPRINGER NATURE CUSTOMER SERVICE
Question
Book Icon
Chapter 3, Problem 1E
To determine

Check whether the statement is true or false.

Expert Solution & Answer
Check Mark

Explanation of Solution

In the Grossman’s model, health is considered as a durable capital good that gets depreciated over time. The medical care purchases, diet, and exercise time are an investment in the health model, and depreciation and some other factors are considered as natural deterioration of health over time. In this model, health is the main factor that drives the utility function. The utility gain by health investment is in direct or indirect form. People’s satisfaction or pleasure of healthiness is the direct form of utility gain from health investment, whereas the healthy time available for daily activities is the indirect form of utility gain from health investment. The utility function derived by health investment is used by Grossman to optimize the utility over gross investment in health in each period. Thus, the given statement is false.

Economics Concept Introduction

Grossman’s model: The Grossman model of health demand shows the interaction between the demand function for health and medical care and the production function for health.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
An increase of 20 million bicycles demand as a result of a lower p
??!!
. What the heck is this GDP thingy? It is Thursday afternoon, just a few days before the holiday season starts in your region, and you decided to visit your uncle Chao who owns a local delivery company. While sitting in the living room watching the evening news with your uncle, you heard the news reporter stating the following with an optimistic tone: "According to recent studies, gross domestic product (GDP) is rising due to an increase in consumer spending. The increase in spending was due to an increase in consumer confidence because the job market has shown a positive increase in both employment and income." Immediately, your uncle Chao looked at you with some confusion on his face and asked: What the heck is GDP, and why does the news dude seem excited about its increase? Does this “good” change in this GDP thingy have any effect on my delivery business? How? Do I need to do something different to prepare for the rise in GDP? How?
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
EBK HEALTH ECONOMICS AND POLICY
Economics
ISBN:9781337668279
Author:Henderson
Publisher:YUZU
Text book image
Microeconomic Theory
Economics
ISBN:9781337517942
Author:NICHOLSON
Publisher:Cengage
Text book image
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Macroeconomics
Economics
ISBN:9781337617390
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Microeconomics
Economics
ISBN:9781337617406
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Microeconomics A Contemporary Intro
Economics
ISBN:9781285635101
Author:MCEACHERN
Publisher:Cengage