Assume 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. 8 6 N 0 D=MB 10 20 40 50 30 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?
Assume 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. 8 6 N 0 D=MB 10 20 40 50 30 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?
Chapter12: Medicare
Section: Chapter Questions
Problem 4QAP
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Question
![Assume 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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe6ab09e2-f11a-4486-af0c-015afafa1dbe%2Fd4a1ff8b-c012-4571-94b8-585de788a135%2Fk50myph_processed.png&w=3840&q=75)
Transcribed Image Text:Assume 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?
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