Analytical problems 12 Faustian health economics. Consider Figure 11.10, which shows the locus of feasible contracts for the population of the nation of Pcoria. a Figure 11.10. The locus of feasible contracts with moral hazard. half full full Fullness In which corner of this diagram (northeast, southeast, northwest, or southwest) is utility highest for consumers? What prevents insurance companies from offering contracts in this corner? b On your own version of Figure 11.10, plot new points to represent where the market would be under (i) a nationally mandated full insurance policy and (ii) an insurance ban. c Would a nationally mandated full insurance policy be optimal for Pcoria? What about an insurance ban? Premium
Analytical problems 12 Faustian health economics. Consider Figure 11.10, which shows the locus of feasible contracts for the population of the nation of Pcoria. a Figure 11.10. The locus of feasible contracts with moral hazard. half full full Fullness In which corner of this diagram (northeast, southeast, northwest, or southwest) is utility highest for consumers? What prevents insurance companies from offering contracts in this corner? b On your own version of Figure 11.10, plot new points to represent where the market would be under (i) a nationally mandated full insurance policy and (ii) an insurance ban. c Would a nationally mandated full insurance policy be optimal for Pcoria? What about an insurance ban? Premium
Chapter12: Medicare
Section: Chapter Questions
Problem 4QAP
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