MICROECONOMICS (LL) W/CONNECT 21ED
21st Edition
ISBN: 9781260361285
Author: McConnell
Publisher: MCG CUSTOM
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Question
Chapter 24, Problem 11DQ
To determine
the relevance of the moral hazard problem to the health care market.
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Suppose that the price elasticity for hip replacement surgeries is 0.2. Further suppose that hip replacement surgeries are originally not covered by health insurance and that at a price of $50,000 each, 10,000 such surgeries are demanded each year. LO24.2 a. Suppose that health insurance begins to cover hip replacement surgeries and that everyone interested in getting a hip replacement has health insurance. If insurance covers 50 percent of the cost of the surgery, by what percentage would you expect the quantity demanded of hip replacements to increase? What if insurance covered 90 percent of the price? If insurance covers 50 percent of the bill, just assume that the price paid by consumers falls 50 percent.) b. Suppose that with insurance companies covering 90 percent of the price, the increase in demand leads to a jump in the price per hip surgery from $50,000 to $100,000. How much will each insured patient now pay for a hip replacement surgery? Compared to the original situation,…
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Chapter 24 Solutions
MICROECONOMICS (LL) W/CONNECT 21ED
Ch. 24 - Prob. 1DQCh. 24 - Prob. 2DQCh. 24 - Prob. 3DQCh. 24 - Prob. 4DQCh. 24 - Prob. 5DQCh. 24 - Prob. 6DQCh. 24 - Prob. 7DQCh. 24 - Prob. 8DQCh. 24 - Prob. 9DQCh. 24 - Prob. 10DQ
Ch. 24 - Prob. 11DQCh. 24 - Prob. 12DQCh. 24 - Prob. 13DQCh. 24 - Prob. 14DQCh. 24 - Prob. 15DQCh. 24 - Prob. 16DQCh. 24 - Prob. 17DQCh. 24 - Prob. 18DQCh. 24 - Prob. 1RQCh. 24 - Prob. 2RQCh. 24 - Prob. 3RQCh. 24 - Prob. 4RQCh. 24 - Prob. 5RQCh. 24 - Prob. 6RQCh. 24 - Prob. 7RQCh. 24 - Prob. 1PCh. 24 - Prob. 2PCh. 24 - Prob. 3P
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