Economics For Healthcare Managers
4th Edition
ISBN: 9781640550483
Author: Robert H. Lee
Publisher: Health Administration Pr
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How would each of following changes affect the demand curve for acupuncture?
a. The price of an acupuncture session increases
b. A reduction in back problems occurs as a result of sessions about strethching on a popular television show.
c. Medicare reduces the copayment for acupuncture from $20 to $10
d. The surgeon general issues a warning that back surgery is ineffetive
e. Medicare stops covering back surgery.
How would each of the following changes affect the demand curve for acupucture?
1) The surgeon general issues a warning that back surgery is ineffective.
2) Medicare stops covering back surgery.
The demand curve for kidneys is downward sloping and the supply curve of kidneys is upward sloping. If it is unlawful to pay someone for a kidney, fewer kidneys will be forthcoming. In other words, the quantity supplied of kidneys is less at $0 than at, say, 20,000.Fewer kidneys supplied mean fewer kidney. Would there be fewer kidney transplants if the supply curve of kidneys is vertical?
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- The "income effect" in the market for aspirin means that a. an increase in the price of aspirin will reduce the total purchasing power of aspirin takers, making them able to afford fewer aspirin. b. a decrease in the price of a substitute good like acetaminophen will make aspirin takers feel a little poorer than they were before. c. aspirin are generally taken by people with higher than average incomes. d. an increase in the price of aspirin will cause headache sufferers to look for a lower priced remedy.arrow_forwardDraw the demand curve in the market for medical care and upload your picture of your diagram, the horizontal axis should represent the number of medical procedures.) Show the quantity of procedures demanded if each procedure has a price of $100. On your diagram, show the quantity of procedures demanded if consumers pay only $20 per procedure. If the cost of each procedure to society is truly $100, and if individuals have health insurance as described above, will the number of procedures performed maximize total surplus? Explain. Consider how health insurance affects the quantity of healthcare services performed. Suppose that the typical medical procedure has a cost of $100, yet a person with health insurance pays only $20 out of pocket. Her insurance company pays the remaining $80. (The insurance company recoups the $80 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undertake.)arrow_forwardIn 1988, Medicare cut the payment for open heart surgery by 2-15 percent. Answer the following questions: a. For thoracic surgeons, who perform open heart surgery, what is the income effect of this fee cut? b. What is the substitution effect induced by this fee cut, again for thoracic surgeons? c. What happens when the income effect dominates the substitution effect? Does an insurer realize savings from a fee cut when the income effect dominates the substitution effect? Explain your answer. Suppose you were director of your country's national health insurance program. What public policies would you implement if you knew that the income effect dominates the substitution effect? Please answer all partsarrow_forward
- The government wants to make medicare benefits available to more people, but to achieve this goal, it needs to make cuts in the existing medicare budget. The two areas where they are considering cuts are non-essential elective surgery and 6-12 month mental health care programs. Applying the concept of diminishing marginal utility, the budget cuts should be made for spending on: a. neither can be compared by measuring marginal utility. b. mental health therapy due to its higher marginal return rate. c. elective surgery due to its lower marginal return rate. d. both programs, which have the same marginal return rate.arrow_forwardA website offers a place for people to buy and sell emeralds, but information about emeralds can be quite imperfect. The website then enacts a rule that all sellers in the market must pay for two independent examinations of their emerald, which are available to the customer for inspection. a. How would you expect this improved information to affect demand for emeralds on this website? b. How would you expect this improved information to affect the quantity of high-quality emeralds sold on the website?arrow_forwardSuppose a health report links the eating of tortilla chips to cancer. Draw supply and demand diagrams to describe how this would be expected to affect the market for tortilla chips, the market for potato chips (a substitute good), and the market for salsa (a complementary good). BE SPECIFIC PLZZZZZarrow_forward
- Consumers are told that the consumption of cauliflower will significantly reduce the risk of cancer. Which of these scenarios is likely to happen in the cauliflower market? A) The supply curve will shift to the right, causing the price of cauliflower to rise. B) The supply curve will shift to the right, causing the price of cauliflower to fall. C) The demand curve will shift to the right, causing the price of cauliflower to rise. D) The demand curve will shift to the left, causing the price of cauliflower to fall.arrow_forwardSuppose there is a new preventative treatment for a common disease. If you take the preventative treatment, it reduces the average amount of time you spend sick by 10%. The optimal combination of Z (home goods) and H (health goods) _____. Suppose there is a new preventative treatment for a common disease. If you take the preventative treatment, it reduces the average amount of time you spend sick by 10%. The optimal combination of Z (home goods) and H (health goods) _____. a. both may decrease b. H may increase; Z may not change c. both may increase or one may stay the same while the other increases. d. Z may increase; H may decrease e. both may increasearrow_forwardWith the help of appropriate diagrams, explain how each of these situations will affect the demand curve for inpatients service at a hospital in a large city: Average real income in the community increases.arrow_forward
- Explain, with the aid of a graph, how a negative research finding about the impact of homemade masks on peoples’ health will affect the demand for homemade masksarrow_forwardWhat determines the price of a drug (be detailed and cover all bases) on the demand side vs the supply side?arrow_forwardSuppose that scientists find evidence that proves tattoos improve the body’s immune system. What would we expect to see? A. a decrease in the demand for tattoos B. no change in the demand for tattoos C. an increase in the demand for tattoos D. a decrease in the supply of tattoosarrow_forward
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