Consider the market for medical services when there is no insurance using demand and supply graph.  Show how the availability of health insurance is likely to affect this market. clearly explain how supply and demand curve will shift or both curve will shift. discuss the impact on market equilibrium quantity and prices. explain patients pay higher or lower price than before.

Adverse selection arises in the market for health insurance because Moral hazard arises in the market for health insurance because OA. for many people, the price of health insurance is beyond their ability to pay for it; the marginal social benefit of healthcare exceeds the marginal benefit perceived by its consumers OB. people optimistically underestimate the health risks that they face; people take too short a view of the benefits of healthcare OC. O D. some of the healthiest people choose to not buy insurance; once insured, a person has less incentive to adopt a healthy lifestyle once insured, a person has less incentive to adopt a healthy lifestyle; some of the healthiest people choose to not buy insurance;

Explain the factors that may cause shortages of physicians in rural areas. Explain what types of policies might encourage physicians to move to rural areas and reduce the shortage.

6. The demand for the doctor's visits, Q, is the following: Q= 5 – 0.04P. The market price of a visit, equals the MC of $100. What is the equilibrium number of visits? What if the consumer purchases full-coverage (no coinsurance) health insurance and the demand stays the same. How many doctor visits would the patient consume? Calculate the deadweight loss or moral hazard cost as a result of the insurance coverage. Remember, DWL is there if units for which MB>MC are not produced, or if units for which MC>MB are produced.

Empirical evidence suggests that state laws mandating health insurance coverage for alcoholism treatment leads to moral hazard on the part of the insured population. Given this information, what are you most likely to observe in a state that has passed such a law?     A. Less use of alcohol treatment facilities     B. Lower rates of drunk driving     C. Higher rates of alcoholism     D. Lower sales of alcohol

Which of the following policies would most likely reduce frictional​ unemployment?   A. All of the stated policies are typically targeted to reduce frictional unemployment   B. None of the of the stated policies are typically targeted to reduce frictional unemployment because frictional unemployment is the equivalent of​ “technological unemployment” articulated by Keynes in the General Theory   C. Expansionary fiscal policy   D. Reducing unemployment compensation payments   E. Greater online or​ internet/web-based employment search sites

1. Fun with cost-sharing. An important distinction in health insurance is between the list price (PL) and out-of-pocket price (PP) of a medical good or service. The list price is the official price that the provider charges the insurance company, while the out-of-pocket price is the price that the insurance customer faces. Sometimes, the out-of-pocket price depends on the list price. a. Suppose a consumer’s demand for a particular medical procedure is Q = 100 − PP. Draw her demand curve in PL–Q space under the assumption of no insurance and label it D1. You will have to think about the relationship between PL and PP to draw it correctly. b. Now assume the same consumer is fully insured. Think about how this affects the relationship between PL and PP and draw a full-insurance demand curve in PL– Q space. Label this curve D2. c. Finally, assume the consumer is part of a partial insurance plan with a copayment provision. Her insurance pays all expenses above and beyond her copayment of…

Once HMOs were initiated, Amy and Becky decided to switch to HMOs.  The Medicare program will pay the HMO 90% of the "average costs of those who remain the Medicare" for every individual who leaves and enrolls in the HMOs.  Below presents the costs to the government.  Patient Traditional Medicare Medicare Plus HMOs Amy 1000 1000 Becky 2000 2000 Carols 3000 3000 Donny 4000 4000 1. Calculate the average cost per individual who remains in Medicare. $   2. How much does the government need to pay to the HMOs for Amy and Becky? $   3. The total cost to the government with HMO is  4. The total cost to the government BEFORE HMO is $

Q24

Compare the market for baby products and the market for childbirth (via either vaginal delivery or cesarean section procedure), then discuss the concept of ‘Agreement of Trade’ in both markets.    Using illustrations, briefly explain how the following economic concepts find significance in understanding the market for health and health care:  Scarcity, Choice and Opportunity Cost  Efficiency and Equity  Benefit-Cost Principle