ESSENTIALS OF ECON LL W/CONNECT
11th Edition
ISBN: 9781266623011
Author: SCHILLER
Publisher: MCG
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Question
Chapter 1, Problem 11P
To determine
(a)
To plot: the
To determine
(b)
To find: the education level when maximum health care is provided.
To determine
(c)
To find: the
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1. Suppose a new drug was discovered that slowed the deterioration of health that accompanies aging. (All the graphs you draw should include labels, down and right arrows to indicate the changes before and after the new drug were discovered)
a. What's the effect on the available time for work Tw and play Tz? Draw its labor–leisure graph including both budget constraints and indifference curve.
b. What's the effect on optimal health H* ? Draw its marginal efficiency of capital (MEC) curve.
c. Draw the production possibilities frontier. Explain it.
Draw a health production function with individuals receiving some health-producing intervention as inputs and health benefits as outputs that show declining returns in output. What does “declining returns” imply about the marginal health benefit per person served/treated along this production function? How does this relate to “specialization of inputs”? How about “selection to treatment”?
The graph above shows an Engel curve for health (H) in (a) and an Engel curve for medical care (m) in (b).
Which one of the following describes the possible impact of income growth on Health in from the "fast lane"
effect?
O
O
As income nises there will be higher utilization of medical care and lower stock of health
As income falls there will be higher utilization of medical care and lower stock of health
As income rises there will be lower utilization of medical care and lower stock of health
As income rises there will be lower utilization of medical care and higher stock of health
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