Social Security benefits are increased each year in proportion to the increase in the CPI, even though most economists believe that the CPI overstates actual inflation. True or False: If the elderly consume the same market basket as other people, then Social Security would provide an increase in their standard of living. True O False Healthcare costs have risen faster than overall inflation. True or False: If the elderly consume a market basket that includes more healthcare than other people, then Social Security would have an uncertain impact on their standard of living. O True O False

Social Security benefits are increased each year in proportion to the increase in the CPI, even though most economists believe that the CPI overstates actual inflation. True or False: If the elderly consume the same market basket as other people, then Social Security would provide an increase in their standard of living. True O False Healthcare costs have risen faster than overall inflation. True or False: If the elderly consume a market basket that includes more healthcare than other people, then Social Security would have an uncertain impact on their standard of living. O True O False

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter17: Income, Poverty, And Health Care

Section: Chapter Questions

Problem 1P

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The portion of total national income spent on health care has O A. changed in a volatile and unpredictable way since 1965. B. risen steadily since 1965. C. decreased following the adoption of the Medicare prescription drug benefit in 2006. D. fallen steadily since 1965.
Health care spending growth is outpacing spending growth in other sectors of theeconomy, growing from 5% of GDP to 17.9% in 2016. Spending growth can arise from anincrease in the quantity of care, an increase in the price of care, or both. a. Give two reasons why the quantity of health care consumed has increased over time.Explain. b. Since 1980, the price of medical care has increased 6.7 times as measured by the medicalcare consumer price index. Explain why it is difficult to track changes in prices formedical care. c. Consumers may benefit if price increases reflect an increase in the quality of medicalcare, but may be hurt if price increases do not reflect an increase in quality. For example,in 2015 Turing Pharmaceuticals raised the price of toxoplasmosis treatment Daraprim byover 5000%, from $13.50 to $750 per pill. Using a diagram of supply and demand, showhow a price increase initiated by suppliers can make consumers worse off when there isno accompanying quality increase. On…
Suppose Social Security benefits are increased each year in proportion to the increase in the CPI, and it is known that healthcare costs have risen faster than overall inflation. If the elderly consumes a market basket that includes more healthcare than other people, then the impact on the standard of living of the elderly is: Answer Choices: a. Positive b. Negative. c. Uncertain d. No impact
Question 11 Assume that a "bundle" of health care goods is indexed to $100 in 1950, and a "bundle" of all goods is also indexed to $100 in 1950. Furthermore, assume that the medical care consumer price index (CPI) grows at 6% per year, while the general CPI grows at 4.2% per year. After 5 years, approximately how much does does the bundle of health care goods cost? $130 $100 1/1 pts $134 $123
1.3 A mandatory health insurance plan costs $4,000. One worker earns $24,500 in employment income and $500 in investment income. Another worker earns $48,000 in employment income and $2,000 in investment income. A third worker earns $68,000 in employment income and $7,000 in investment income. A premium-based system would cost each worker $4,000. A wage tax–based system would cost each worker 8.5 percent of wages. An income tax–based system would cost each worker 8 percent of income. For each worker, calculate the cost of the insurance as a share of total income. E = Employment income I = Investment income P = Premium cost of insurance Premium as a percentage of income = P/(E + I) W = Wage tax cost of insurance = 0.085 × E Wage tax cost as a percentage of income = W/(E + I) T = Income tax cost of insurance = 0.080 × (E + I) Income tax cost as a percentage of income = T/(E + I) 1.4 Which of the plans in exercise 1.3 would impose the larger burden on those with incomes under $25,000: a…
Table: Income Distribution in Four Countries provides recent data from the World Bank on the distribution of income in four countries. Percent income top quintile Percent income middle three quintiles combined O Bangladesh. Costa Rica. Table: Income Distribution in Four Countries Bangladesh El Salvador 41.4% 46.4% O Mexico. 50.0% 47.7% 8.6% Percent income bottom quintile Based on the data, the country with the distribution of income that is closest to equal is: El Salvador. Mexico 50.1% 5.9% 44.2% Costa Rica 54.0% 5.7% 41.8% 4.2%
Question 10 Assume that a "bundle" of health care goods is indexed to $100 in 1950, and a "bundle" of all goods is also indexed to $100 in 1950. Furthermore, assume that the medical care consumer price index (CPI) grows at 6% per year, while the general CPI grows at 4.2% per year. After 1 year, approximately how much does does the bundle of all goods cost? $104 $108 $100 $106
A4 unemployment insurance might be redundant. If a job faces a high risk of termination, then this will be priced into the wage as a compensating differential. Do you agree or disagree that risk of unemployment should be accounted for as a compensating differential, and that unemployment insurance is unnecessary? Why?
Total health expenditures are a function of price and O A. Reimbursement O B. Value O C. Assets O D. Quantity
S. national health expenditure was $148 per person in 1960 and $4,790 in 2000. The Consumer Price Index had a value of 29.6 in 1960 and a value of 172.2 in 2000. In 1960 dollars, how much was spending in 2000? Show all your work
Why is an increase in income alone not sufficient in improving health and education objectives?
8. The total population of a country is 1 million. Of this 120,000 are pensioners (retired), 160,000 are below the age of 16 and about 20,000 cannot take up a job because either they are under institutional care or hospitalized and unfit to work. About 14,000 do not want to take up a job (therefore they do not even look for a job for a long period of time) and about 7,000 are estimated to be on average in a state of a change in their life and employment (however they are actively looking for employment). The economy is subject to high seasonal variations therefore at the month of January (at which the current labour survey is contacted) about 70,000 summer period employees (working in the tourist industry) are temporarily out of work, waiting to be called back to work in March when the season begins. 12,000 are out of work and are actively looking to find a job while an additional 3,000 are newcomers in the labour force who have been given a job offer and are expected to start working…