[A] For this question, assume that the market for family physicians is perfectly competitive. To reduce the shortages of family physicians in rural Saskatchewan, the Ministry of Health increased the supply of physicians such as by hiring more internationally trained graduates. Despite this initiative, rural Saskatchewan still faces shortages of family physicians. 1. Why would that be the case? Draw the graph below to help explain your answer. 2.  How would this impact the total health expenditure for family physicians? 3. What are the implications for policymakers in this situation?

[A] For this question, assume that the market for family physicians is perfectly competitive. To reduce the shortages of family physicians in rural Saskatchewan, the Ministry of Health increased the supply of physicians such as by hiring more internationally trained graduates. Despite this initiative, rural Saskatchewan still faces shortages of family physicians.

1. Why would that be the case? Draw the graph below to help explain your answer.

2.  How would this impact the total health expenditure for family physicians?

3. What are the implications for policymakers in this situation? 

B] Suppose that provincial governments filed civil lawsuits against tobacco manufacturers seeking to recover the increased costs of operating programs that can be attributed to smoking. However, cigarette manufacturers and the province agreed to an out-of-court settlement that ended these suits. As a result of an agreement, cigarette manufacturers increased cigarette prices by $0.70 per pack. Before the agreement, the average retail price of cigarettes was $2.50 and 25 billion packs of cigarettes were sold per year. If the elasticity of demand for cigarettes is -0.50, how much will cigarette smoking fall as a result of the settlement?