Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText - Access Card Package (12th Edition)
12th Edition
ISBN: 9780134004983
Author: Michael Parkin
Publisher: PEARSON
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Chapter 16, Problem 9SPA
To determine
Government subsidizing private insurers and attaining efficient coverage.
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7) The graph below depicts the social loss from the existence of health insurance in the presence of moral
hazard.
Price
Demand curve with partial coinsurance
Quantity
a. What is the cause of the social loss? Briefly explain.
b. Why do we have health insurance if social loss is created as a result of health insurance? (
Social loss
3. What are the appropriate government responses to health externalities such as smoking,
drinking, and obesity? Give examples.
8. Agreement and disagreement among economists
Suppose that Dmitri, an economist from a research institute in Texas, and Frances, an economist from a university in Massachusetts, are arguing over
health Insurance. The following dialogue shows an excerpt from their debate:
Frances: A popular topic for debate among politicians as well as economists is the idea of providing government assistance for health
benefits.
Dmitri: I think it is oppressive for the government to tax people who take care of themselves in order to pay for health insurance for
those who are obese.
Frances: I disagree. I think government funding of health insurance is useful to ensure basic fairness.
The disagreement between these economists is most likely due to
*
Despite their differences, with which proposition are two economists chosen at random most likely to agree?
Employers should not be restricted from outsourcing work to foreign nations.
Business managers can raise profit more easily by reducing costs than by…
Chapter 16 Solutions
Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText - Access Card Package (12th Edition)
Ch. 16.1 - Prob. 1RQCh. 16.1 - Prob. 2RQCh. 16.1 - Prob. 3RQCh. 16.1 - Prob. 4RQCh. 16.2 - Prob. 1RQCh. 16.2 - Prob. 2RQCh. 16.2 - Prob. 3RQCh. 16.2 - Prob. 4RQCh. 16.3 - Prob. 1RQCh. 16.3 - Prob. 2RQ
Ch. 16.3 - Prob. 3RQCh. 16.3 - Prob. 4RQCh. 16.3 - Prob. 5RQCh. 16 - Prob. 1SPACh. 16 - Prob. 2SPACh. 16 - Prob. 3SPACh. 16 - Prob. 4SPACh. 16 - Prob. 5SPACh. 16 - Prob. 6SPACh. 16 - Prob. 7SPACh. 16 - Prob. 8SPACh. 16 - Prob. 9SPACh. 16 - Prob. 10SPACh. 16 - Prob. 11APACh. 16 - Prob. 12APACh. 16 - Prob. 13APACh. 16 - Prob. 14APACh. 16 - Prob. 15APACh. 16 - Prob. 16APACh. 16 - Prob. 17APACh. 16 - Prob. 18APACh. 16 - Prob. 19APACh. 16 - Prob. 20APACh. 16 - Prob. 21APACh. 16 - Prob. 22APACh. 16 - Prob. 23APACh. 16 - Prob. 24APA
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- Why is it difficult to measure health outcomes?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_forwardThe following diagram shows the market for medical checkup. What are the equilibrium price and quantity of medical checkup? Which kind of externality problems exists in the market for medical checkup? How does this externality problem affect the efficiency of the market? Explain in detail. How can the government solve this externality problem? Explain in detail.arrow_forward
- 8. Agreement and disagreement among economists Suppose that Darnell, an economist from a business school in Georgia, and Eleanor, an economist from a school of industrial relations, are arguing over health insurance. The following dialogue shows an excerpt from their debate: Eleanor: A popular topic for debate among politicians as well as economists is the idea of providing government assistance for health benefits. Darnell: I think it is oppressive for the government to tax people who take care of themselves in order to pay for health insurance for those who are obese. Eleanor: I disagree. I think government funding of health insurance is useful to ensure basic fairness. The disagreement between these economists is most likely due to Despite their differences, with which proposition are two economists chosen at random most likely to agree? Having a single income tax rate would improve economic performance. Immigrants receive more in government benefits than they contribute in taxes.…arrow_forwardAssume that health insurance is private in a country, and the market for insurance is competitive. The figure below shows the marginal benefit and willingness and ability to pay curve. Premium (thousands of dollars per year) $160 billion. $80 billion. $160 million. $80 million. 12 10 8 606 4 2 0 D = MB 10 20 30 40 50 Quantity (millions of families insured) Suppose that the marginal social benefit of insurance exceeds the willingness and ability to pay by a constant $2,000 per family per year. Suppose the marginal cost of health insurance is a constant $8,000 a year. If the government decides to provide public health insurance, how much will taxpayers have to pay?arrow_forward3arrow_forward
- Suppose you are told that electronic cigarettes cause health problems such as depression and problems with arteries. You also are told that electronic cigarettes do NOT produce second-hand smoke, meaning that e-smoking (called "vaping") by one person does not harm a person standing nearby. How might economists respond? A standard welfare economist would say that e-smoking imposes an externality if health insurance is pooled and a. premiums are shared. A standard welfare economist would say that e-smoking does not increase social costs, unless having health O b. insurance makes people more likely to use electronic cigarettes. A behavioral economics would ask if people who use e-cigarettes become addicted. C. All of the above. d.arrow_forwardName the 3 core functions of public health and describe those with the 10 essential services of Public Health.arrow_forwardWhich of the following does NOT generate negative externalities in part through health care costs? a. Smoking b. Alcohol abuse c. Antibiotic overuse d. Opioid abuse e. None of the abovearrow_forward
- 6 Explain why does the government act as a producer of health insurance for certain population group?arrow_forwardAssume that health insurance is private in a country, and the market for insurance is competitive. The figure below shows the marginal benefit and willingness and ability to pay curve. Premium (thousands of dollars per year) $6,000 per family. $4,000 per family. $8,000 per family. $2,000 per family. 12 10 8 6 2 0 D = MB 10 20 30 40 50 Quantity (millions of families insured) Suppose that the marginal social benefit of insurance exceeds the willingness and ability to pay by a constant $2,000 per family per year. Suppose the marginal cost of health insurance is a constant $8,000 a year. If the government decides to subsidize health insurance, what subsidy will achieve the efficient coverage?arrow_forwardIdentify And describe a significant problem faced by Medicare? (AP gov)arrow_forward
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