Indicate whether the statement is true or false, and justify your answer.In the Grossman model, the marginal efficiency of investment in health care declines as health improves.
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Indicate whether the statement is true or false, and justify your answer.
In the Grossman model, the marginal efficiency of investment in health care declines as health improves.
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- Indicate whether the statement is true or false, and justify your answer.In real life, investments in health can generate long-lasting benefits, but the Grossman model neglects this aspect of health.Indicate whether the statement is true or false, and justify your answer.In the framework of the Grossman model, an individual’s level of health is completely controlled by her actions. Thus, in any given period, an individual is unconstrained in her choice of health status.Indicate whether the statement is true or false, and justify your answer. In the Grossman model, optimal health status declines with age.
- One major premise of the Rothschild–Stiglitz model is that there is a perfectly competitive market for health insurance. Suppose instead that the market is not perfectly competitive, and in fact competitor firms have a hard time entering the market. Could a pooling equilibrium occur in this case? What is it about competition that prevents pooling in the Rothschild–Stiglitz model? No formal proof is necessary, but do make your reasoning clear. Evaluate the following statement: competition in health insurance markets is harmful.In the framework of the Grossman model, suppose there is an increase in the return in alternate non-health market investments. Draw what happens to the MEC curve and the optimal level of health. Explain intuitively why this might be the case in reality.Indicate whether the statement is true or false, and justify your answer.The fact that older people spend more on health care is evidence against theGrossman model, which predicts that spending will decline as δ increases.
- In what sense is the individual considered a “producer” of health in the Grossman model?An empirically testable hypothesis for additional health care expenditure as an investment rather than as an expense is: a. If an increase in health care expenditure today results in an increase in productivity tomorrow, then health careexpenditure has an investment effect. b. If an increase in health care expenditure today results in an a rise in health care stock prices, then health care expenditure has an investment effect. c. If an increase in health care expenditure today results in worse health outcomes today, then health care expenditure has an investment effect. d. If an increase in health care expenditure today results in a more competitive health care market tomorrow, then health care expenditure has an investment effect.Indicate whether the statement is true or false, and justify your answer. Unlike with most types of goods, deriving a demand curve for health care is quite simple because people rarely skimp on health care.
- Indicate whether the statement is true or false, and justify your answer. Aging shifts the marginal efficiency of investment in health curve inward.Indicate whether each statement is true or false, and justify your answer.One reason why total health expenditures are rising is because of an aging population.How can the New York sick leave law impact the use of emergency rooms? Reference the Grossman model for guidance.