Assume the following utility functions: U₁= x2/3 and U₂ = x 1. What is the marginal utility of both utility functions? 2. Draw a graph showing the marginal utility of both functions in terms of number of contacts. Assuming that the marginal cost of a disease remains constant at 0.5, how many contacts would the two persons with utility functions U, and U₂ choose to have? Explain your answer
Q: 1. Why is the aggregate demand curve downward sloping?
A: Since you have posted multiple questions, we will provide the solution only to the first question as…
Q: Draw an appropriate diagram and use it to explain the logical steps in your own words, needed to…
A: Optimal consumption bundle: The optimal consumption bundle is such that at that bundle the…
Q: True/ False The value of an investment can be determined by the rate or return.
A: The rate of return, which is represented as a percentage of the initial investment, is a metric for…
Q: Suppose instead the government imposes the $3 tax on top of the posted price (i.e. paid by…
A: Market equilibrium is a state in which the quantity of a good or service supplied by producers…
Q: The consumer demand equation for tissues is given by q = (110-p)2, where p is the price per case of…
A: Total revenue is the product of price and quantity. Marginal revenue is the derivative of total…
Q: Consider four mutually exclusive alternatives: A B C D Cost $65 $55 $25 $80 Uniform annual benefit…
A: Payback period is a financial metric used in economics to determine the length of time it takes to…
Q: Suppose there are two consumers, A and B. The utility functions of each consumer are given by:…
A: The rate at which a consumer is ready to give up certain units of a good to consume another good is…
Q: Briefly explain how each of the following events would affect the aggregate demand curve a) an…
A: Aggregate demand is the sum of Consumption, Investment, government spending and net export. AD = C…
Q: y= l^0.5 + k^0.5 is a production function that exhibits a/an? a. increasing returns to scale b.…
A: Production function shows the relationship between the inputs used and output produced. Constant…
Q: Nabil is planning to retire in 25 years. He wishes to deposit a regular amount every quarter until…
A: An effective yearly rate of interest is the real return on a savings account or any interest-paying…
Q: How will the following event(s) affect demand and/or supply and equilibrium price (p*) and…
A: Demand curve is the downward sloping curve. Supply curve is the upward sloping curve. Equilibrium…
Q: Find an illustration or graph that identifies the different phases of the business cycle. Thereafter…
A: The business cycle refers to the natural fluctuation of economic activity, characterized by…
Q: Without trade, consumer surplus amounts to Group of answer choices $9,720. $19,440. $23,280.…
A: Consumer surplus is the difference between maximum price consumers are willing to pay and market…
Q: per ye -rtunity being created?
A: If a bank can borrow or lend at LIBOR, it means that the bank can either borrow or lend money at the…
Q: Problem 4. Consider the following table. A Big Mac in the US cost USD5.66 in January 2021. Given the…
A: The PPP exchange rate, or Purchasing Power Parity exchange rate, is a measure of the relative value…
Q: Problem 1. Consider a small open economy classical model described by the following equations:…
A: The equilibrium is reached where the aggregate demand and supply are equal. The change in the…
Q: What type pf correlation does the graph show ?
A: Correlation is a statistical measure that describes the strength and direction of the relationship…
Q: Describe the national income and product accounts (NIPA).
A: GDP is an important indicator of a country's economic health, as it reflects the size of its economy…
Q: Suppose a monopolistic competitor faces the following cost and demand in the short run: What is the…
A: In a monopolistic competition, There exists a large no. of sellers selling differentiated products.…
Q: Question #1: A lot of media regulation is geared towards areas such as content (protecting…
A: The study of how economic ideas and principles relate to the media sector is known as media…
Q: What is the significance when it comes to moral hazard to show it's efficient function of a medical…
A: Moral hazard is the phenomenon where individuals or organizations take on more risk when they are…
Q: Price Discrimination. Suppose a monopolist faces two separate markets. Demand in market 1 is P1 =…
A: Monopoly refers to the market where single firm exists in the market. The monopoly firm is price…
Q: Problem 1. Consider a small open economy classical model described by the following equations:…
A: Equilibrium in economics is a state of stability and balance. Any deviation from this level will…
Q: Suppose there are two consumers, Az B. The utility functions of each consumer are given by kem xong…
A: Optimal consumption bundle: The optimal consumption bundle is such that at that bundle the…
Q: Research the impact of COVID-19 on the Canadian Economy
A: Introduction: The COVID-19 pandemic has had a significant impact on economies around the world, and…
Q: You are the manager in charge of global operations at BankGlobal – a large commercial bank that…
A: ANSWER:- Yes, the new campaign will be launched.
Q: Additional units of a variable input are added to a fixed input. Total output rises from 0 units to…
A: Increasing marginal return is when the increase in input lead to an increase in the output which is…
Q: Which one of the following economists believed imposing taxes on imports and exports must be at a…
A: An economist is a specialist who researches how people, organizations, governments, and communities…
Q: How does the antitrust treatment of price discrimination, tying contracts, and exclusive dealing…
A: Antitrust treatment of price discrimination, tying contracts, and exclusive dealing contracts in the…
Q: The following graph shows the weekly market for craft beer in some hypothetical economy. Suppose the…
A: The government collects taxes from individuals and businesses, or it includes them in the price of a…
Q: Consider two hypothetical states that operate under different laws governing labor unions. The…
A: Unemployed is the difference between number of workers supplied and number of workers demanded at…
Q: In the long run, when a perfectly competitive firm experiences negative economic profits, firms exit…
A: In a perfectly competitive market, there are a large number of small firms that produce identical…
Q: 1. Dave, Brian, and Mike's demand schedules for chicken dinners are all given in the table below.…
A: Demand schedule is the tabular representation of quantity demanded at various prices. Demand curve…
Q: In Ergonia, 5 million workers produce a real output of $500 billion in 2018 and the same number of…
A: Labor productivity can be defined as output per worker or per hour worked. It is the Average Product…
Q: The demand for cement is given by P= 40 - 8Q, where P is the unit price in kroner (SEK) and Q is…
A: An externality is a cost or benefit that is not reflected in the market price of a good or service…
Q: what is the opportunity cost of a pound of apples what is the opportunity cost of a pound of ban
A: Opportunity cost is the cost of producing one good in terms of other. Opportunity cost shows the…
Q: "A taxi company currently has nine cabs in its fleet, and its total daily cost is $4,000. If the…
A: When the company revenue is more than the cost , it means it will be profitable business , if…
Q: The numbers on BOTH the x-axis and y-axis read: 4, 8, 12, 16, 20, 24, etc. With free trade and…
A: Consumer surplus is the difference between maximum price consumer is willing to pay and actual price…
Q: Why are many goods sold in the United States produced overseas, often in several counties? a. There…
A: Outsourcing is a business practice in which a company hires a third party to perform tasks, handle…
Q: A study of the costs of electricity generation for a sample of 56 British firms in 1946-1947 yielded…
A: Total Cost consists of both fixed cost and variable cost. Fixed Cost will remain constant at all…
Q: 6. An analyst is assessing a DM's utility function for profit Y, in dollars, ranging from -400,000…
A: Expected utility is a tool that helps to analyze situations in which there is a possibility number…
Q: Instead of assuming a linear demand curve, suppose we assume that demand is char- acterized by the…
A: Elasticity of Demand The price sensitivity of the qty demanded or the price elasticity of demand…
Q: Calculate money multiplier in this example and what is the final increase in the quantity of money
A: The money multiplier is defined as the total amount of the money that can be created in the economy…
Q: Which of the following industries is most likely to be monopolistically competitive? Explain A)…
A: Monopolistic competition is a market structure where there are many firms producing similar but not…
Q: a. What increase in aggregate demand is necessary to achieve this? billions. b. If successful, what…
A: Aggregate demand curve is the sum of Consumption, Investment, government spending, and net export.…
Q: Suppose that two firms, Lucky Bird and Full Coop, are the only sellers of seitan buffalo wings in…
A: Game theory is concerned with the choice of an optimal strategy in conflict situations.
Q: Colombia is the world’s biggest producer of roses. The global demand for roses increases and at the…
A: The foreign exchange market is a financial global marketplace where currencies are bought and sold.…
Q: Consider an economy with two goods, consumption c and leisure 1, and a representative consumer. The…
A: Considering an economy with two goods consumption and leisure A consumer's daily leisure hours l =…
Q: lease no written by hand solution describe the debt market list the charectesticsof debt
A: A financial market where people can purchase and sell debt assets including bonds, notes, and bills…
Q: Behavioral economics helps explain: which of the following????????????? a)why people are rational.…
A: Behavioural economics is a field of study that explores how psychological, social, and emotional…
Step by step
Solved in 8 steps with 2 images
- According to Finkelstein et al. (2003), approximately what portion of national medical spending is directed toward the treatment of conditions attributed to obesity? A. One-eighth B. One-sixth C. One-quarter D. One-third E. One-halfSuppose consumers consume and gain utility from two types of goods and services – (1) health care and (2) all other goods & services. Using this information, derive the demand curve for health care.Faustian health economics. Consider Figure 11.10, which shows the locus of feasible contracts for the population of the nation of Pcoria. In which corner of this diagram (northeast, southeast, northwest, or southwest) is utility highest for consumers? What prevents insurance companies from offering contracts in this corner? On your own version of Figure 11.10, plot new points to represent where the market would be under (i) a nationally mandated full insurance policy and (ii) an insurance ban. Would a nationally mandated full insurance policy be optimal for Pcoria? What about an insurance ban?
- Explain what is meant by the following sentence: “All Whole Life policies involve prefunding of future mortality costs.”Suppose, if ill, that Fred’s demand for health services is summarized by the demand curve Q = 50 − 2P , where P is the price of services. How many services does he buy at a price of $20? Suppose that Fred’s probability of illness is 0.25. What is the actuarially fair price of health insurance for Fred with a zero coinsurance rate? If the insurance company pays Fred’s entire loss, will the insurance company offer him insurance at the actuarially fair rate? Why? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.Empirical evidence suggests that state laws mandating health insurance coverage for alcoholism treatment leads to moral hazard on the part of the insured population. Given this information, what are you most likely to observe in a state that has passed such a law? A. Less use of alcohol treatment facilities B. Lower rates of drunk driving C. Higher rates of alcoholism D. Lower sales of alcohol
- Suppose that there are two countries, Beta and Gamma. Suppose further that everyone in country Beta is on Insurance B and everyone in country Gamma is on Insurance G. Suppose further that both governments use government-set price controls. In 2005, country Beta decided to change the reimbursement rate for pharmaceuticals, but country Gamma did not make this change. You, a researcher, want to study the effect of offering coverage for this drug had an impact on health expenditures. You have average health expenditures for State Beta and Gamma prior to 2005 and post-2005. Using the information in the table below, a quick difference-in-difference calculation suggests covering this drug ____ health expenditures by approximately ____. State Time Periods Pre-2005 Post-2005 State Beta $1000 $1400 State Gamma $1500 $1700 a. decreased; $400 b. increased; $200 c. increased; $400 d. decreased; $200Suppose that there are two countries, Beta and Gamma. Suppose further that everyone in country Beta is on Insurance B and everyone in country Gamma is on Insurance G. Suppose further that both governments use government-set price controls. In 2005, country Beta decided to change the reimbursement rate for pharmaceuticals, but country Gamma did not make this change. You, a researcher, want to study the effect of offering coverage for this drug had an impact on health expenditures. You have average health expenditures for State Beta and Gamma prior to 2005 and post-2005. Using your finding from the question above, you can infer that country Beta likely _____ reimbursement rates for pharmaceutical drugs. State Time Periods Pre-2005 Post-2005 State Beta $1000 $1400 State Gamma $1500 $1700 a. lower b. did not change c. raisedSuppose you have two persons, one with more elastic demand for medical care than the other. If they both obtain identical health insurance coverage (or both have their % of costs paid by insurance increased), whose demand will be affected most? Given what you know about relative demand for MC for well vs. ill individuals, more educated vs. less educated persons, and wealthy vs. less wealthy individuals, which of each pair will have the greatest increase in demand under health insurance?
- Assume that the daily demand for packs of cigarettes in the tobacco-addicted nation of Pcorian is Q=100−P Further assume that the marginal cost of producing a pack of cigarettes is §6, and that the market for cigarettes is perfectly competitive. Assume that each pack of cigarettes smoked does §6 worth of health damage to the smoker in the form of increased cancer risk and a total of §5 worth of health damage to the smoker’s neighbors via secondhand smoke. Finally, assume that all Pcorian cigarette consumers are aware of these costs. Suppose the government decides to pursue a Pigouvian solution to eliminate social loss. What sort of tax or subsidy would they implement, and what is the resulting quantity of cigarette packs purchased? 2. The opposition party in the Pcorian parliament loudly opposes the proposed tax plan as government meddling. The opposition leader invokes the Coase theorem and says that the socially efficient level of smoking will occur even in the absence of…Suppose we allocate a fixed budget for tuberculosis screening between two alternatives: screening the population generally, which has a marginal cost per test of MCG and a marginal benefit of MBG additional cases detected per test, and screening in homeless shelters, with a corresponding MCS and MBS. Assume it is currently true that MBG/MCG < MBS/MCS. Understanding that MB decreases (increases) as quantity increases (decreases) and the reverse is true for MC, we can conclude that: a. too much screening is being done at homeless shelters relative to general screening. b. too much general screening is being done relative to screening at homeless shelters. c. the price of screening in homeless shelters is too high. d. the allocation is already optimal if there is a fixed budget because we can’t equate the ratios of marginal benefit and marginal cost. e. we can only make the allocation optimal if the prices can be changedFaustian health economics. Consider Figure 11.10, which shows the locus of feasible contracts for the population of the nation of Pcoria. In which corner of this diagram (northeast, southeast, northwest, or southwest) is utility highest for consumers? What prevents insurance companies from offering contracts in this corner? On your own version of Figure 11.10, plot new points to represent where the market would be under (i) a nationally mandated full insurance policy and (ii) an insurance ban. (Please draw a diagram) Would a nationally mandated full insurance policy be optimal for Pcoria? What about an insurance ban? Suppose the devil approaches the newly elected president of Pcoria with an unusual bargain. He offers to magically eliminate moral hazard, but in return, Pcoria must forbid contracts that are more than half full. On a new version of Figure 11.10, draw a new locus of the contracts that would be feasible if the president takes the devil's bargain. Should the president take…
