Pearson eText Microeconomics -- Access Card
2nd Edition
ISBN: 9780136849513
Author: Acemoglu, Daron, Laibson, David, List, John
Publisher: PEARSON
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Question
Chapter 11, Problem 8P
(a)
To determine
Effect of providing insurance to every worker on labor demand.
(b)
To determine
Effect of an increase in wage on the supply of labor.
(c)
To determine
Effect of Affordable Care Act on the equilibrium wage and labor in the market.
(d)
To determine
Effect on equilibrium labor and wage when workers value the insurance to be worth less than a dollar.
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The following is an excerpt from "The Labor Market Effects of Rising Health Insurance Premiums," by Katherine Baicker, Amitabh Chandra.
We estimate the effect of rising health insurance premiums on wages, employment, and the distribution of part‐time and full‐time work using variation in medical malpractice payments driven by the recent “medical malpractice crisis.” We estimate that a 10% increase in health insurance premiums reduces the aggregate probability of being employed by 1.2 percentage points, reduces hours worked by 2.4%, and increases the likelihood that a worker is employed only part time by 1.9 percentage points. For workers covered by employer provided health insurance, this increase in premiums results in an offsetting decrease in wages of 2.3%.
This finding is consistent with the presence of ____.
a. adverse selection
b. community rating
c. risk selection
d. wage pass-through
The following is an excerpt from "The Labor Market Effects of Rising Health Insurance Premiums," by Katherine Baicker, Amitabh Chandra.
We estimate the effect of rising health insurance premiums on wages, employment, and the distribution of part‐time and full‐time work using variation in medical malpractice payments driven by the recent “medical malpractice crisis.” We estimate that a 10% increase in health insurance premiums reduces the aggregate probability of being employed by 1.2 percentage points, reduces hours worked by 2.4%, and increases the likelihood that a worker is employed only part time by 1.9 percentage points. For workers covered by employer provided health insurance, this increase in premiums results in an offsetting decrease in wages of 2.3%.
This finding is consistent with the presence of ____.
The following question asks about what happens to employment (Q), wages (W), and total
compensation (T) when firms begin offering health insurance benefits. Without health insurance
benefits, the labor supply curve in terms of wages is given by W 6 + Q, and the labor demand
curve in terms of wages is W = 10 - Qp. Q here is hours of work. W is wages in dollars per hour.
Assume that workers value the health benefits at $5 per hour. Assume the benefits cost the firm
$4 per hour to provide.
1.
When firms begin offering health insurance benefits, which of the following is true about the new
demand curve? In this exercise, demand curve is still defined as function of wages (rather than as a
function of total compensation).
The demand curve will shift up by $4
The demand curve will shift down by $4
O The demand curve will shift up by $5
O The demand curve will shift down by $5
Chapter 11 Solutions
Pearson eText Microeconomics -- Access Card
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Similar questions
- A study found that minorities and the unemployed consult physicians less frequently. Accessing healthcare is difficult for rural Americans. Will video telemedicine increase access? Can this technology enhance healthcare access for the underprivileged?arrow_forwardWhich theory explains the effect of health on income? Direct income theory Efficient producer theory Productive time theory Allostatic load theoryarrow_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
- Draw a demand and supply diagram and use it to explain the effects of occupational licensure of physicians on the quantity, quality of care, and income of physicians in the market for physician services.arrow_forwardSenator Deal proposes to offer a choice to future retirees: if you retire before age 70, the benefits are calculated on the last 35 years of income; if you retire at age 73, however, you receive benefits calculated on only the last 15 years of income. Which option will high-income workers likely choose? Low-income workers? Why?arrow_forwardAccording to a study, individuals belonging to minority groups and those who are unemployed tend to delay seeking medical attention. Access to healthcare is a significant challenge for individuals residing in rural areas of the United States. Can video telemedicine enhance accessibility? Can this technological advancement enhance healthcare accessibility for underprivileged populations?arrow_forward
- How can I Analyze the effect of healthcare reform on the healthcare consumer who uses the Insurance company launching a new medical product for the health insurance exchangearrow_forwardWhat is a potential benefit of offering a health and wellness program to government workers?arrow_forwardA noted insurance authority has said, “Because the financing of long-term care is inconsistent with insurance principles, it is a problem that does not lend itself to solution through insurance.” In what ways is the financing of long-term care inconsistent with insurance principles? What, in your opinion, is the solution to the problem of financing long-term care?arrow_forward
- What provision of federal law makes employer-based health insurance even more attractive to most EMPLOYEES who receive it than just the value of the premium? O Insured employees can take a tax deduction for the entire amount paid to doctors for the employee's treatment even if much of the cost was paid by insurance. Employer-based health insurance offers much better coverage than other types of insurance Employer-based health insurance offers lower copays and deductibles than other types of insurance The value of health insurance paid by an employer is not taxable income for the employeearrow_forwardWhat is the largest health care program in the United States? A)DOD Tricare B) Medicaid C) Medicare D) The ACAarrow_forwardI need answer typing no chatgpt pls Which situation is most likely to create an incentive for doctors to perform unnecessary procedures O a fee-for-service health insurance policy O free market health care O a single-payer system O a health maintenance organizationarrow_forward
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