EBK PRINCIPLES OF MICROECONOMICS (SECON
2nd Edition
ISBN: 9780393616149
Author: Mateer
Publisher: W.W.NORTON+CO. (CC)
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Chapter 18, Problem 1SP
To determine
Marginal cost of the consultation.
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For a person who previously had no insurance and received an insurance plan paying for 80 percent of all types of medical care, what increase in use would you expect for hospital care, dental care, and physician services, on average?
Suppose that a study finds that the price elasticity of demand for MRI's is 0.3 (in absolute value). If the price of care were to ___ by 3%, we would expect the quantity of preventative care consumed to fall by ____%.
Suppose that a study finds that the price elasticity of demand for MRI's is 0.3 (in absolute value). If the price of care were to ___ by 3%, we would expect the quantity of preventative care consumed to fall by ____%.
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b. rise; 0.9%
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EBK PRINCIPLES OF MICROECONOMICS (SECON
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- Demand studies in health care have provided estimates of both income and price elasticity. Estimates of income elasticity are usually above +1.0. Estimates of price elasticity typically range between -0.1 and -.75 (with hospital services at the lower end and elective services at the upper end). What information do these estimates convey? What does the price elasticity of demand estimates imply for government policymakers, insurance companies, and medical providers' decisions? What does the income elasticity of demand estimates imply for government policymakers, insurance companies, and medical providers' decisions?arrow_forwardOne of the significant problems in medical care markets may be the information problem. Asymmetric information has led to two important defects in the medical marketplace. What are they? How do these defects affect medical markets?arrow_forwardWhat effects would joining a MCO have on your clinic regarding staffing, patient volume, and financial stability?What policies and procedures should be used by the MCOs to reduce costs for their clientele?arrow_forward
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- Health Care Demand An individual's demand for physician office visits in a given year is given by, Q = 11-0.045P, where Q is the number of office visits and P is the out-of-pocket price paid by the individual for each visit. Assume the market price of an office visit is $180. Use this information to answer the questions below. Questions: 1. Without insurance, how many office visits will the individual make in one year? NOTE: Enter a formula to calculate the number of visits, rounding your answer to the nearest whole number. 2. Suppose the individual has insurance and pays only a $40 copayment for each visit. How many office visits will the individual make in one year? NOTE: Again, enter a formula, rounding your answer to the nearest whole number. 3. What is the moral hazard and deadweight loss (DWL) associated with having insurance? NOTE: Enter formulas in the respective boxes below. Moral Hazard: DWL: 4. Based on the Nyman model, suppose the value the individual places on each visit…arrow_forwardList and explain the three broad reasons that an individual would need long-term care care.arrow_forwardDraw a graph and an argument about how increases in health due to one medical innovation can lead to improvements in health that are not directly affected by that innovation. Does it matter the demographic properties of those individuals whose health is improved by the initial innovation?arrow_forward
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