Micro Economics For Today
10th Edition
ISBN: 9781337613064
Author: Tucker, Irvin B.
Publisher: Cengage,
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Question
Chapter P2, Problem 5KC
To determine
The impact of the decrease in the consumer income on the supply curve.
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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
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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
???
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???
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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
Knowledge Booster
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