2. A consumer’s demand for a medical service is: Q = 100 - ?? where ?? is the out-of-pocket price she/he actually faces. She/he is considering four different insurance options: uninsurance, full insurance, a 50% coinsurance plan, and a copayment plan with a $25 copay. a. Assume this service has a list price of ??= $70. Calculate Q under each insurance plan. b. Calculate the amount of social loss under each insurance plan.

2. A consumer’s demand for a medical service is: Q = 100 - ?? where ?? is the out-of-pocket price she/he actually faces. She/he is considering four different insurance options: uninsurance, full insurance, a 50% coinsurance plan, and a copayment plan with a $25 copay. a. Assume this service has a list price of ??= $70. Calculate Q under each insurance plan. b. Calculate the amount of social loss under each insurance plan.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.4P

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