Draw the demand curve in the market for medical care and upload your picture of your diagram, the horizontal axis should represent the number of medical procedures.) Show the quantity of procedures demanded if each procedure has a price of $100. On your diagram, show the quantity of procedures demanded if consumers pay only $20 per procedure. If the cost of each procedure to society is truly $100, and if individuals have health insurance as described above, will the number of procedures performed maximize total surplus? Explain. Consider how health insurance affects the quantity of healthcare services performed. Suppose that the typical medical procedure has a cost of $100, yet a person with health insurance pays only $20 out of pocket. Her insurance company pays the remaining $80. (The insurance company recoups the $80 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undertake.)

Draw the demand curve in the market for medical care and upload your picture of your diagram, the horizontal axis should represent the number of medical procedures.) Show the quantity of procedures demanded if each procedure has a price of $100. On your diagram, show the quantity of procedures demanded if consumers pay only $20 per procedure. If the cost of each procedure to society is truly $100, and if individuals have health insurance as described above, will the number of procedures performed maximize total surplus? Explain. Consider how health insurance affects the quantity of healthcare services performed. Suppose that the typical medical procedure has a cost of $100, yet a person with health insurance pays only $20 out of pocket. Her insurance company pays the remaining $80. (The insurance company recoups the $80 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undertake.)

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter4: Demand, Supply, And Markets

Section: Chapter Questions

Problem 6QFR

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What would happen if, in order to provide lower cost health care, the government decided to set a price ceiling (Pmax) in the health insurance market? (Please answer questions a, b, and c below.) What is the effect of this maximum price legislation on the market for health insurance? Briefly explain the situation for both consumers and producers (i.e. health care providers). What might the government do to achieve their intended aims (i.e. lower costs and increased quantity)?
Ralph will consume any health care service just as long as its MB exceeds the money he must pay out of pocket. His insurance policy has a zero deductible and a 10 percent copay, so Ralph only has to pay 10 percent of the price charged for any medical procedure. Which of the following procedures will Ralph choose to consume? a. An $800 eye exam that has an MB of $100 to Ralph. b. A $90 hearing test that has an MB of $5 to Ralph. c. A $35,000 knee surgery that has an MB of $3,000 to Ralph. d. A $10,000 baldness treatment that has an MB of $16,000 to Ralph.
Suppose the government imposes a system of price ceilings in the health care industry as part of an overall health care reform bill. a) draw a graph of the health care market and show equilibrium price and quantity. b) assume the government imposes an effective price ceiling in the health care market. Show the price ceiling in your graph. Indicate what will happen to quantity demanded and quantity supplied of health over time ? c) would a shortage or surplus result ? I llustrate in your graph.
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.
Consider how health insurance affects the quantity of health care services performed. Suppose that the typical medical procedure has a cost of $160, yet a person with health insurance pays only $40 out of pocket. Her insurance company pays the remaining $120. (The insurance company recoups the $120 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undergo.) Consider the following demand curve in the market for medical care. Use the black point (plus symbol) to indicate the quantity of procedures demanded if each procedure has a price of $160. Then use the grey point (star symbol) to indicate the quantity of procedures demanded if each procedure has a price of $40. ? Price of Medical Procedures 200 180 160 140 120 100 80 60 40 20 0 0 10 20 30 40 50 Demand 60 70 Quantity of Medical Procedures 80 90 100 + Qat P=$160 * Qat P=$40
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.
Use the black point (plus symbol) to indicate the quantity of procedures ded if each procedure has a price of $100. Then use the grey point Consider how health insurance affects the quantity of health care services performed. Suppose that the typical medical procedure has a cost of $100, yet a person with health insurance pays only $20 out of pocket. Her insurance company pays the remaining $80. (The insurance company recoups the $80 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undergo.) (star symbol) to indicate the quantity of procedures demanded if each procedure has a price of 520. 200 180 Q at P-$100 160 140 120 Q, at P=$20 100 20 60 40 Demand 30 40 50 80 70 801 90 100 Quantity of Medical Procedures 20 10 20 Price of Medical Procedures
Use a graph to illustrate how the following changes would affect the demand curve for inpatient services at a hospital in a large city. a. Average real income in the community increases. b. A number of physicians in the area join together and open up a discount-price walk-in clinic; the cross-price elasticity of demand between physician services and inpatient hospital services is –0.50.
Suppose the government imposes a system of price ceilings in the health care industry as part of an overall health care reform bill. a) what happens to the amount of market exchange ? b) explain the impact of the price ceiling on efficiency c) who bears the cost of the regulation?
1. Utility and Consumer Surplus A. Use the figure below to fill in the total utility and marginal utility of medical care in the table. In this example, is the marginal utility of health care increasing or decreasing? What are some reasons why this might be the case (briefly explain; approximate 3 sentences)? Health (H) Utility 16 15 13 10 3 4 Medical care (q) 1 2 Units of Medical Care 0 1 Total Utility Marginal Utility 2 3 4 Briefly explain: Conceptually, does the marginal utility scheduled above reflect your own demand for going to the dentist to get a check-up?
The attached diagram shows the market for medical checkup. (1) what are the equilibrium price and quantity of medical checkup? (2) which kind of externality problems exists in the market for medical checkup? how does this externality problem affect the efficiency of the market? explain in detail. (3) how can the government solve this externality problem? explain in detail.
2. In the following graph, suppose market is in equilibrium at point A. Determine if you agree or disagree with the statements. a. Suppose there is an increasing in demand for health care services but no changes in supply, then the new equilibrium will be at point C. b. From equilibrium point A, if there exist an increase in supply of the doctors in the area, the new equilibrium would be at point B. c. From equilibrium point A, if there is an induced demand from the increased number of doctors in the area, the new equilibrium would be at point C. d. If the demand curve is D', one can not say that there is an induced demand with the increase of physicians in the area. Q₂ Q₁ Quantity of Services Delivered Price per Unit Output