Consider how health insurance affects the quantity of health care services performed. Suppose that the typical medical procedure has a cost of s160, yet a person with health insurance pays only s40 out of pociet. Her insurance company pays the remaining s120. (The insurance company recoups the s20 trough premiums, but the premium a person pays does not depend on how many procedures that person chooses to undergo.) Consider the following demand curve in the market for medical care Use the biack poine (aus symbel) to indicate the quantity of procedures demanded if each procedure has a price of s60. Then use the prey point (ster symbel) to indicate the quantity of procedures demanded if each procedure has a price of s40.
Consider how health insurance affects the quantity of health care services performed. Suppose that the typical medical procedure has a cost of s160, yet a person with health insurance pays only s40 out of pociet. Her insurance company pays the remaining s120. (The insurance company recoups the s20 trough premiums, but the premium a person pays does not depend on how many procedures that person chooses to undergo.) Consider the following demand curve in the market for medical care Use the biack poine (aus symbel) to indicate the quantity of procedures demanded if each procedure has a price of s60. Then use the prey point (ster symbel) to indicate the quantity of procedures demanded if each procedure has a price of s40.
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 1.1P: (Calculating Price Elasticity of Demand) Suppose that 50 units of a good are demanded at a price of...
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Consider how health insurance affects the quantity of health care services performed. Suppose that the typical medical procedure has a cost of $160, yet a person with health insurance pays only $40 out of pocket. Her insurance company pays the remaining $120. (The insurance company recoups the $120 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undergo.) Consider the following demand curve in the market for medical care
Transcribed Image Text:Consider how health iInsurance affects the quantity of health care services performed. Suppose that the typical medical procedure has a cost of s160,
yet a person with health insurance pays only $40 out of pocket. Her insurance company pays the remaining s:20. (The insurance company recoups
the s120 through premlums, but the premium a person pays does not depend on how many procedures that person chooses to undergo.)
Consider the following demand curve in the market for medical care.
Use the black point (plus symbol) to indicate the quantity of procedures demanded if each procedure has a price of s160. Then use the grey point
(star symbol) to indicate the quantity of procedures demanded if each procedure has a price of s40.
Transcribed Image Text:200
10
180
140
120
at Pes40
100
Demand
• 1* 20 e 0 0 To 0 10
Quantity of Medical Procedures
Price of Medical Procedures
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