Managerial Economics & Business Strategy (Mcgraw-hill Series Economics)
9th Edition
ISBN: 9781259290619
Author: Michael Baye, Jeff Prince
Publisher: McGraw-Hill Education
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Question
Chapter 13, Problem 15PAA
To determine
To find: The reason for professional associations which regulate services.
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A number of professional associations, such as the American Medical Association and the American Bar Association, support regulations that make it more costly for their members (for example, doctors and lawyers) to practice their services. While some of these regulations may stem from a genuine desire for higher-quality medical and legal services, self-interest may also play a role. Explain.
Suppose an insurance company wants to charge a very healthy individual a premium of $1,200 a year for health coverage. It also wants to charge a less healthy individual a premium of $3,600 a year for health coverage. It is seeking to ascertain from any given customer information regarding his/her health by asking for several pieces of health-related information, such as doctor assessments of the person’s health, history of health-related problems, etc. The opportunity cost of a very healthy person securing a health report is $250 and the opportunity cost of a less healthy person securing a health report is $650. Of the choices below, how many reports should the company request to best ensure its paying the right premium to the right person?
Reconsider the previous health insurance question. Of the choices below, which one is closest to the spread between the minimum possible number of reports and the maximum possible reports to achieve the company’s desired outcome?
Reconsider again…
Which of the following is NOT true?
Group of answer choices
On average, most costs of medical school are covered by student tuition
Most who get accepted into a medical school attend one.
Most who attend medical school graduate
Most who graduate medical school go into a residency program
Chapter 13 Solutions
Managerial Economics & Business Strategy (Mcgraw-hill Series Economics)
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