Health Economics
14th Edition
ISBN: 9781137029966
Author: Jay Bhattacharya
Publisher: SPRINGER NATURE CUSTOMER SERVICE
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Chapter 4, Problem 15EQ
(a)
To determine
Identify the theories that support the findings in the given article.
(b)
To determine
Determine the factors that cause for Michigan results other than fasting during Ramadhan.
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Medicare recipients can purchase supplemental private insurance (known as Medigap insurance) to fill the gap in coverage left by Medicare. This gap includes copayments, deductibles, and prescription drug expenses not covered by Medicare. Several years ago, the government enacted regulations that specify minimum standards for items that Medigap policies must cover. This made the policies more expensive, and as a consequence, about 25 percent of the elderly who would have purchased some Medi-gap insurance purchased none at all [Finkelstein, 2004]. Consider an individual who consumes two goods, "insurance" and "all other goods." The cost of a unit of Medigap insurance is $1, as is the cost of a unit of all other goods. Sketch a budget constraint and set of indifference curves that are consistent with the following scenario: In an unregulated market, an individual with a $30,000 income purchases $5,000 worth of Medigap insurance. The government then puts mandates on Medigap policies that…
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- The Grossman model emphasizes the important roles that education, health knowledge, and expectations about future income and health play in the choices that determine health in both the short and long runs. Education both increases the likelihood of having higher income, which is good for health, and can compensate for lower income in which of the following ways: a. Education is associated with better health literacy, knowledge and execution of healthy diets and lifestyles b. Education enables people to communicate better with well-educated doctors and so they learn better how to manage their own health over time c. Education enables people to read about side effects and avoid unnecessarily risky procedures d. All of the above e. None of the abovearrow_forwardTrue or false? According to the Grossman model, if a new drug were discovered that eliminated the steady deterioration of health that accompanies aging – but does not eliminate sudden events like heart attacks or being hit by a bus – then the demand for jelly donuts, french fries, and physical activity in the presence of buses would decline. Justify your answer.arrow_forwardWith the COVID-19 epidemic, the demand for ethyl alcohol, which is very important in terms of meeting the need for hygiene, has also increased and the insufficient supply caused the price of ethyl alcohol to rise suddenly. During this period, the price of ethyl alcohol per liter rose to 400 TL, which caused a serious increase in all disinfectant prices, including cologne. The government, which wanted to prevent the consumer from being victimized, limited the price of ethyl alcohol per liter to 150 TL and banned the sale in the market above this price. If supply cannot be increased, what is the result of this government's implementation? Briefly explain.arrow_forward
- The UN Committee on Economic, Social, and Cultural Rights (CESCR) is charged with interpreting the International Covenant on Economic, Social, and Cultural Rights (ICESR). In 2000 the Committee released General Comment 14, “The Right to the Highest Attainable Standard of Health”. The General Comment is important for advancing our understanding of a right to health under international law because it: (choose one) A) Sets out what has become known as the “3AQ model” addressing the conditions for health on the basis of Availability, Accessibility, Acceptability, and Quality. B) Creates new, specific obligations with respect to the delivery health care services that are binding on all countries of the world C) Makes it clear that the absence of a right to health in the Canadian Charter or Rights and Freedoms means that Canada is in clear violation of its obligations under the ICESR. D) Offers an account of a right to health that has been used by health advocates around the world E) A, B…arrow_forwardOur earlier model focused on the most basic trade-off introduced by the policy. One aspect of the policy that is also heavily debated is the fact that not every household can afford to upgrade their car in order to avoid paying the ULEZ fees. We now want to understand how best to design the scrappage scheme, which subsidises changing cars for those who need it the most. In particular, we want to know whether the scrappage scheme can create a moral hazard problem. To guide our analysis, consider the following simple model. The government would like to introduce a subsidy to help citizens who need their car for work and cannot afford to buy a ULEZ-compliant car. It also wants to ensure that only citizens who need to drive their car regularly use the subsidy. Instead of the two groups of citizens discussed above, we focus on one particular citizen who does not drive very often, only once a year. As a result, this citizen does not emit excessive pollution even with a car that is not…arrow_forwardOur earlier model focused on the most basic trade-off introduced by the policy. One aspect of the policy that is also heavily debated is the fact that not every household can afford to upgrade their car in order to avoid paying the ULEZ fees. We now want to understand how best to design the scrappage scheme, which subsidises changing cars for those who need it the most. In particular, we want to know whether the scrappage scheme can create a moral hazard problem. To guide our analysis, consider the following simple model. The government would like to introduce a subsidy to help citizens who need their car for work and cannot afford to buy a ULEZ-compliant car. It also wants to ensure that only citizens who need to drive their car regularly use the subsidy. Instead of the two groups of citizens discussed above, we focus on one particular citizen who does not drive very often, only once a year. As a result, this citizen does not emit excessive pollution even with a car that is not…arrow_forward
- The Grossman model emphasizes the important roles that education, health knowledge, and expectations about future income and health play in the choices that determine health in both the short and long runs. Education both increases the likelihood of having higher income, which is good for health, and can compensate for lower income in which of the following ways: O a. Education is associated with better health literacy, knowledge and execution of healthy diets and lifestyles Ob. Education enables people to communicate better with well-educated doctors and so they learn better how to manage their own health over time OC. Education enables people to read about side effects and avoid unnecessarily risky procedures Od. All of the above Oe. None of the abovearrow_forwarddescribe how COVID-19 may differentially affect families across the socioeconomic spectrum. That is, how might the consequences of COVID-19 for families with low SES be similar to or different from the consequences of COVID-19 for families with high SES?arrow_forward16.12. Two consumers, Ron and David, together own 1,000 baseball cards and 5,000 Pokémon cards. Let xR denote the quantity of baseball cards owned by Ron and yR denote the quantity of Pokémon cards owned by Ron. Similarly, let xD denote the quantity of baseball cards owned by David and yD denote the quantity of Pokémon cards owned by David. Suppose, further, that for Ron, MRSRxy = yR/xXR, while for David, MRSPxy = yD/2xD. Finally, suppose xR = 800, yR = 800, xD = 200, and yD = 4,200. a) Draw an Edgeworth box that shows the set of feasible allocations in this simple economy. b) Show that the current allocation of cards is not economically efficient. c) Identify a trade of cards between David and Ron that makes both better off. (Note: There are many possible answers to this problem.)arrow_forward
- Frustration over US pharmaceutical pricing has led researchers to develop frameworks for evaluation that can be used by any purchaser or patient making complex drug choices. One of the most prominent, the Institute for Clinical and Economic Review, uses clinical trial data and compares value -- per quality adjusted life year (QALY) -- under actual market pricing and other possible references prices for specific drugs. Do you think $/QALY is an appropriate metric for evaluating the value of new drugs?arrow_forwardWho detected the endowment effect first? Tell us about the design of the experiment and its main conclusions.arrow_forwardIt is an established fact in economics that for goods which are described as inferior goods, when incomes of consumers increase, consumers tend to reduce their consumption of such goods and rather patronize goods which would normally provide higher satisfaction .If a researcher decides to undertake a study to verify the general preposition that as incomes rise, the consumption of inferior goods falls, which type of economic study and what analysis is this? Justify your answer.arrow_forward
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