Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 24, Problem 4RQ
To determine
The problem associated with a change in Tina’s behavior.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Susan was frustrated. As chair of the school of nursing at the local university, she wantedher students to get used to using electronic health records. Ideally, these students wouldleave her program and be able to use their employer’s EHR system without any additionalorientation. Other campus health profession leaders had similar concerns. However, thefaculty found that within a 100-mile radius of the university, the area’s many hospitals andthree main healthcare systems all used different EHR vendors.The local healthcare systems promoted electronic health information. They were allconcerned about the safety and security of the records and the needs of their patients. Theywere also aware of the national push for system to integrate EHRs. In reality, however, therecords housed in the variety of systems could not be shared. The software was toodisconnected and dissimilar.Susan wondered what her next step should be. Which system should she adopt, ifany? How could she help move these…
Label each of the following behaviors with the correct bias or heuristic. LO8.3 a. Your uncle says that he knew all along that the stock market was going to crash in 2008. b. When Fred does well at work, he credits his intelligence. When anything goes wrong, he blames his secretary. c. Ellen thinks that being struck dead by lightning is much more likely than dying from an accidental fall at home. d. The sales of a TV that is priced at $999 rise after another very similar TV priced at $1,300 is placed next to it at the store. e. The sales of a brand of toothpaste rise after new TV commercials announce that the brand “is preferred by 4 out of 5 dentists.”
Health care expenditures coming directly out of consumers' pockets, primarily in the form of deductibles and
copayments, account for what
care spending?
O 18 percent
35 percent
44 percent
O 21 percent
Chapter 24 Solutions
Microeconomics
Ch. 24 - Prob. 1DQCh. 24 - Prob. 2DQCh. 24 - Prob. 3DQCh. 24 - Prob. 4DQCh. 24 - Prob. 5DQCh. 24 - Prob. 6DQCh. 24 - Prob. 7DQCh. 24 - Prob. 8DQCh. 24 - Prob. 9DQCh. 24 - Prob. 10DQ
Ch. 24 - Prob. 11DQCh. 24 - Prob. 12DQCh. 24 - Prob. 13DQCh. 24 - Prob. 14DQCh. 24 - Prob. 15DQCh. 24 - Prob. 16DQCh. 24 - Prob. 17DQCh. 24 - Prob. 18DQCh. 24 - Prob. 1RQCh. 24 - Prob. 2RQCh. 24 - Prob. 3RQCh. 24 - Prob. 4RQCh. 24 - Prob. 5RQCh. 24 - Prob. 6RQCh. 24 - Prob. 7RQCh. 24 - Prob. 1PCh. 24 - Prob. 2PCh. 24 - Prob. 3P
Knowledge Booster
Similar questions
- A group of 200 people seek out an insurance company to underwrite health insurance for its members. It expected medical spending for the group is $1,200,000, what will the average premium bn If the health insurance company adds a leading fee of 20 percent? $14,400 $12,000 O $7,200 O $6,000arrow_forwardla. Suppose a particular population has two kinds of health risks, high and low. Let the expected annual health care costs for the high risk be $10,000, and for the low risk, half that. If there are twice as many low risk as high risk individuals, and if the one insurer's administrative load is 20%, what would the community rated premium be if everyone is compelled to and able to buy health insurance? Note: administrative load can be construed as the amount that the insurer has in costs to run the plans above and beyond the "health care costs." a. $7500 b. $6000 c. $12,000 d. $8000 2a. Now suppose insurance rules are changed to permit a new insurer (B) to enter this marketplace and be allowed to exclude the high risk due to pre-existing condition exclusions while the other incumbent insurer (A) is forced to still charge a community rate (as in the ACA). Assuming loads remain at 20% in long run equilibrium, what would the premiums be in each market, (low risk, high risk)? a. $5000,…arrow_forwardSuppose that one course of treatment costs $500,000. If given to patient A, it will increase life expectancy by one month; for patient B, by two months; for patient C, by three months; and for patient D, by four months. The marginal cost per additional year of life for the patient most likely to benefit is and the marginal cost per additional year of life for the patient least likely to benefit is O $500,000; $2 million $1.5 million; $6 million $200,000; $500,000 O $2 million; $500,000 $6 million; $1.5 millionarrow_forward
- Definition: The certainty equivalent (CE) of a lottery is the amount of money you would have to be given with certainty to be just as well-off with that lottery. Definition: The risk premium is the amount of money that a risk-averse individual will pay to avoid taking the risk. In other words, risk premium measures the amount of income that an individual would give up to leave her indifferent between a risky choice and a certain one. Assume that you have a von Neumann-Morgenstern utility function over lotteries that give you and amount x if Event 1 happens and y if Event 1 does not happen: U(x, y) = p √x + (1-p) √y. (a) If p=0.5, calculate the utility of a lottery that gives you $10,000 if Event 1 happens and $100 if Event 1 does not happen. In addition, calculate the expected income of the lottery. (b) If you were sure to receive $4,900, what would your utility be? (Hint: If you receive $4,900 with certainty, then you receive $4,900 in both events.) (c) Calculate the certainty…arrow_forward2. Now assume that CC Inc. is hiring Marie as a consultant to computerize its office operations. Everything is the same in Marie's situation as in Stephan's except that her disutility of effort is different. Specifically, C(E)=E²³/10. a) How much effort will Marie exert if her commission rate is 20%? 100%? Does effort depend on a? b) Now suppose that Marie and CC are negotiating the terms of her contract (i.e. the level of a and b) before she starts. Before they settle on who gets exactly what in the end, they agree that, whatever contract they ultimately choose, it must be efficient, i.e. it must maximize the sum of CC's profits and Marie's utility. If the contract is efficient, what will be the level of b? Comment. c) Suppose now that, to retain Marie, CC Inc. must offer her a utility level of at least 1 unit (because this is what she can get working for another firm). What must a be? If Marie's alternative utility is 5 units, will she work for CC Inc?arrow_forwardConsider an industry with two firms that are simultaneously deciding whether to make costly safety investments such as sprinkler systems in a plant or escape tunnels in a mine. Unlike the firms, potential employees do not know how safe it is to work at each firm. Firm 2 Employees only know how risky it is to work in this industry. If only Firm 1 invests, workers do not know that safety has improved at only Firm 1's plant. Because the government's accident statistics for the industry fall, workers realize that it is safer to work in the industry, so both firms pay lower wages. No investment Investment 600 300 No investment The profit matrix shows how the firms' profits depend on their safety investments. 600 750 Firm 1 Could cheap talk lead both firms to invest in safety? Why or why not? 750 675 Cheap talk Investment 300 675 A. cannot help the firms settle on a single equilibrium because the firms have a dominant strategy. B. can help the firms settle on a single equilibrium because the…arrow_forward
- You are the manager of an organization in America that distributes blood to hospitals in all 50states and the District of Columbia. A recent report indicates that nearly 50 americans contractHIV each year through blood transfusions. Although every pint of blood donated in the unitedstates undergoes a battery of nine different test, existing screening methods can detect only theantibodies produced by the body’s immune system-not foreign agents in the blood, newlyinfected HIV donors can pass along the virus through blood that has passed existing screeningtests. Happily, researchers have developed a series of new tests aimed at detecting and removinginfections from donated blood before it is used in transfusions. The obvious benefit of these testsis reduced incidence of infection through blood transfusions. The report indicates that the currentprice of decontaminated blood is $60 per pint. However, if the new screening methods areadopted, the demand and supply for…arrow_forward8. Suppose that a sales force has found 20 qualified buyers and has begun the sales process. The sales manager estimates that 10% eventually proceeds to make a purchase. Assume that a professional company offers three services, priced at $2,000, $7,000 and $20,000, respectively. Based on past results or the sales manager’s estimates, you project that 60% of first-time buyers will choose the cheapest option, 30% will choose the middle option and 10% will choose the most expensive option. a. Calculate the size of a likely sale for any prospect that makes a purchase. b. How many qualified buyers must be found in order for the company to generate $80,000 in sales in a given period? Your final answer must be rounded to the nearest whole number.arrow_forwardIn 2017, health care spending in the US accounted for approximately of the GDP. O 5% 17% 25% 38% 45% QUESTION 2 Without any change to the health insurance system, by 2082, health care spending in the US is expected to reach 5% 18% 25% 49% QUESTION 3 The main reason why health care spending is increasing over time is O Increasing administrative costs Increasing uncompensated care O population aging increase in sophistication and quality of medical services the Affordable Care Act QUESTION 4 Regarding health insurance, the number of uninsured individuals in the US is approximately 8 million 18 million. 28 million 48 million 98 million of the GDP.arrow_forward
- 13 Secondhand smoke L Assume that the daily demand for packs of cigarettes in the tobacco-addicted nation of Pcoria is Q=100 – P Further assume that the marginal cost of producing a pack of cigarettes is $6, and that the market for cigarettes is perfectly competitive. Assume that each pack of cigarettes smoked does §6 worth of health damage to the smoker in the form of increased cancer risk and a total of $5 worth of health damage to the smoker's neighbors via secondhand smoke. Finally, assume that all Pcorian cigarette consumers are aware of these costs. a Assume that a Pcorian smoker named Jay states that he is willing to buy a pack of cigarettes for $8, but not a penny more. In this market, where the price is $6 per pack, what are the private benefits and private costs incurred whenever he buys a pack of cigarettes? Is it privately efficient for him to buy a pack of cigarettes at this price? b What about the public benefits and public costs? Is it socially efficient for him to buy a…arrow_forward2 Scenario Your client, InsureCorp, is an insurance company considering launching an 'income insur- ance' product in the nation of Motherland. Income insurance is a product that fully insures a household against changes in income caused by a major injury or illness. At present, no businesses are selling income insurance products in Motherland. Initial market research suggests that there are 15,000 households in Motherland interested in purchasing income insurance. Your client expects that the fixed cost of launching the income insurance product will be $25,000,000 per year, and that each policy issued to a customer will cost the company an additional $2,000 in sales commissions. 2.1 Your task Your client wants you to analyse the potential market for income insurance and report on the following: What is the maximum price the company can charge a household for an income insurance policy? What is the expected profit (or loss) for the company if it becomes a monopoly provider of income…arrow_forward[Adverse Selection] Each of the two players receives an envelope, in which there is anamount of money that is equally distributed from $0, $1, $2, ..., $100. The amounts in twoenvelopes are independent. After receiving the envelope, each individual can check exactlyhow much money is put in his/her own envelope. Then each player has the option to exchangehis/her envelope for the other individual's prize. The decisions are made simultaneously. Ifboth individuals agree to exchange, then the envelopes are exchanged; otherwise, if at leastone player chooses not to exchange, each individual keeps his/her own envelope and receivesits attached sum of money.a. Model this game as a static Bayesian game (write the normal formrepresentation) and find the Bayesian Nash equilibrium.b. Consider a new game where the probability distribution of money in eachenvelope is changed. The amount is equal to $100 with probability 90%, and is equalto each number in $0, $1, $2, ... ,$99 with probability 0.1%.…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education