MyLab Economics with Pearson eText -- Access Card -- for Macroeconomics
6th Edition
ISBN: 9780134125954
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 1.1.8PA
To determine
Incentive problem for the student loan program.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
New York Times columnist David Brooks wrote about the implementation of the Affordable Care Act (ACA) and described a possible adverse selection cascade: “the young may decide en masse that it is completely irrational for them to get health insurance that subsidizes others.”
a. Why might it be irrational for young and healthy people to buy health insurance?
b. In what sense do young and healthy people who buy health insurance provide a subsidy to people who are older or who are ill?
c. What do you think Brooks meant by an adverse selection cascade? How might the actions of young and healthy people contribute to adverse selection problems in the health insurance system?
Jay Bhattacharya and M. Kate Bundorf of Stanford University have found evidence that people who are obese and work for firms that have employer-provided health insurance receive lower wages than people working at those firms who are not obese. At firms that do not provide health insurance, obese workers do not receive lower wages than workers who are not obese.
Source: Jay Bhattacharya and M. Kate Bundorf, "The Incidence of the Health Care Costs of Obesity," Journal of Health
Economics,
Vol. 28, No. 3, May 2009, pp. 649-58.
Firms that provide workers with health insurance may pay a lower wage to obese workers than to workers who are not obese because the
former
tend to be
less healthy
and consequently
A.
more
costly to insure and therefore employ due to their
higher
claim submission rate.
B.
less
productive at work.
C.
experience
higher
rates of absenteeism and early retirement.
D.
all of the above.
E.
A and B only.
Regarding the…
In an article on how exercise improves health, the New York Times reported on an observational study that found that each hour spent running added two hours to a person's life expectancy [Brody. 20061 A week later, a letter to the editor questioned whether the results really proved anything about the impact of exercise on health, and suggested that the study could just as well be showing that "those with a strong heart and good health are otherwise more likely to enjoy running and do it more regularly." How does this challenge to the exercise study relate to the problems faced by economists trying to &slims the causal effects of economic policy? How could you design an experimental study to estimate the impact of running on life expectancy?
Chapter 1 Solutions
MyLab Economics with Pearson eText -- Access Card -- for Macroeconomics
Ch. 1.A - Prob. 1PACh. 1.A - Prob. 2PACh. 1.A - Prob. 3PACh. 1.A - Prob. 4PACh. 1.A - Prob. 5PACh. 1.A - What is the area of the triangle shown in the...Ch. 1.A - Prob. 7PACh. 1 - Prob. 1TCCh. 1 - Prob. 2TCCh. 1 - Prob. 1.1.1RQ
Ch. 1 - Prob. 1.1.2RQCh. 1 - Prob. 1.1.3PACh. 1 - Prob. 1.1.4PACh. 1 - Prob. 1.1.5PACh. 1 - Prob. 1.1.6PACh. 1 - Prob. 1.1.7PACh. 1 - Prob. 1.1.8PACh. 1 - Prob. 1.1.9PACh. 1 - Prob. 1.1.10PACh. 1 - Prob. 1.1.11PACh. 1 - Prob. 1.2.1RQCh. 1 - Prob. 1.2.2RQCh. 1 - Prob. 1.2.3RQCh. 1 - Prob. 1.2.4RQCh. 1 - Prob. 1.2.5PACh. 1 - Prob. 1.2.6PACh. 1 - Prob. 1.2.7PACh. 1 - Prob. 1.2.8PACh. 1 - Prob. 1.2.9PACh. 1 - Prob. 1.2.10PACh. 1 - Prob. 1.2.11PACh. 1 - Prob. 1.2.12PACh. 1 - Prob. 1.2.13PACh. 1 - Prob. 1.3.1RQCh. 1 - Prob. 1.3.2RQCh. 1 - Prob. 1.3.3RQCh. 1 - Prob. 1.3.4PACh. 1 - Prob. 1.3.5PACh. 1 - Prob. 1.3.6PACh. 1 - Prob. 1.3.7PACh. 1 - Prob. 1.3.8PACh. 1 - Prob. 1.3.9PACh. 1 - Prob. 1.3.10PACh. 1 - Prob. 1.3.11PACh. 1 - Prob. 1.4.1RQCh. 1 - Prob. 1.4.2RQCh. 1 - Prob. 1.4.3PACh. 1 - Prob. 1.4.4PA
Knowledge Booster
Similar questions
- Briefly describe the theory of rational ignorance.arrow_forwardIn this chapter on page 61 the passage describes British scholar W. D. Ross, who rejected utilitarianism as an ethical approach. Ross felt that utilitarianism was too simplistic and did not align with how people ordinarily think about morality and obligations in real-world situations. The quote indicates that while utilitarianism provides a basic framework, Ross believed a more complex account was needed to capture ethics adequately in a diverse society. Different normative theories have their strengths and limitations, and reasonable people can disagree on these complex philosophical issues. Essentially, I believe in the golden rule which encourages people to have empathy, goodwill, and respect toward all others. It promotes ethical and considerate behavior by appealing to our own self-interest in fair and compassionate treatment. please help resond to this discussion postarrow_forwardBriefly explain that policy measures is one of factor that effect consumer prices during covid 19 Pandemicarrow_forward
- A tax policy analyst proposes that we should eliminate exemptions from taxes on food andmedicine (i.e., we should start taxing these goods) because taxes on these goods would be anefficient way to raise revenue.a. What do you think the analyst means when she says that taxing these items would bean efficient way to raise revenue? b. Is the analyst correct that taxing food and medicine would be an efficient way to raiserevenue? Draw a diagram to help explain. Hint: Think about the demand curve for thesegoods.c. Why might there be little political support for such a policyarrow_forwardBriefly explain the causes of marketfailurearrow_forwardWhat 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)?arrow_forward
- Read the second chapter of the textbook (A. Banerjee and E. Duflo “Poor Economics”, Penguin, 2012), and pay particular attention to the data the authors provide about household expenditures.Given these numbers and given the evidence presented in the papers, do you think that individuals in low-income countries behave as if they were starving. If so, why do you think that is?arrow_forwardIn Wheelan's Naked Economics, and according the the chapter on "Economics of Information," which of the below statements correctly captures why students pay thousands of dollars to get into highly selective universities such as Harvard? Group of answer choices Students who graduate from Harvard University are significantly brighter and better educated than those who do not. Students engage in irrational behavior when they spend thousands of dollars on tuition and college expenses to study at highly selective universities such as Harvard. There is little value to spending huge amounts of money to study at a highly selective university such as Harvard, because the university from which a student graduates has little (if any) impact upon the student's job or income prospects. The choice of university signals information. Employers assume in general that the selectivity of universities ensures quality of education, and therefore graduates of Harvard and other selective universities…arrow_forward(a) Suppose that a company pays its workers $20 per hour and provides an additional $2 per hour worth of fringe benefits, including a basic health insurance policy. With the aid on an appropriate graph discuss the firm’s reaction to a state mandate that requires it expand the items covered in the health care policy. (b) What is likely to happen to the number of people covered?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc