Suppose that a health insurance plan offers a $10 deductible with a 20% coinsurance rate. The price of healthcare is $1. The price of healthcare is given by D (HC), while the quantity of healthcare consumed is given by Q (HC). The demand curve for "A's" is given by: D (HC A's) 10-3*Q (HC) The demand curve for "B's" is given by: D (HC B's) 20-Q (HC) a. What is the consumption of both "A's" and "B's" without health insurance? b. What is the consumption of both "A's" and "B's" with health insurance? c. Is there any distortion of healthcare consumption by having health insurance? If so, how much (separate by group). d. How much do "A's" spend out-of-pocket on healthcare, with health insurance? How much do "B's"?
Suppose that a health insurance plan offers a $10 deductible with a 20% coinsurance rate. The price of healthcare is $1. The price of healthcare is given by D (HC), while the quantity of healthcare consumed is given by Q (HC). The demand curve for "A's" is given by: D (HC A's) 10-3*Q (HC) The demand curve for "B's" is given by: D (HC B's) 20-Q (HC) a. What is the consumption of both "A's" and "B's" without health insurance? b. What is the consumption of both "A's" and "B's" with health insurance? c. Is there any distortion of healthcare consumption by having health insurance? If so, how much (separate by group). d. How much do "A's" spend out-of-pocket on healthcare, with health insurance? How much do "B's"?
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter4: Demand, Supply, And Markets
Section: Chapter Questions
Problem 6QFR
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Transcribed Image Text:Suppose that a health insurance plan offers a $10 deductible with a 20% coinsurance rate. The
price of healthcare is $1. The price of healthcare is given by D (HC), while the quantity of
healthcare consumed is given by Q (HC). The demand curve for "A's" is given by:
D (HC A's) =10-3*Q (HC)
The demand curve for "B's" is given by:
D (HC B's) =20- Q (HC)
a. What is the consumption of both "A's" and "B's" without health insurance?
b. What is the consumption of both "A's" and "B's" with health insurance?
c. Is there any distortion of healthcare consumption by having health insurance? If
so, how much (separate by group).
d. How much do "A's" spend out-of-pocket on healthcare, with health insurance?
How much do "B's"?
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