Health Economics
Health Economics
14th Edition
ISBN: 9781137029966
Author: Jay Bhattacharya
Publisher: SPRINGER NATURE CUSTOMER SERVICE
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Chapter 6, Problem 7E
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interest). At what age is the rate of disease development the highest? Source: Adapted from P. Coleman et al., “Endemic Stability―A Veterinary Idea Applied to Public Health," The Lancet 357 (2001): 1284–86. 19. If C(x) is the cost of producing x units of a commodity, then the average cost per unit is c(x) = C(x)/x. The marginal cost is the rate of change of the cost with respect to the number of items produced, that is, the derivative C'(x). (a) Show that if the average cost is a minimum, then the marginal cost equals the average cost. (b) If C(x) = 16,000 + 200x + 4x³/2, in dollars, find (i) the cost, average cost, and marginal cost at a produc- tion level of 1000 units; (ii) the production level that will minimize the average cost; and (iii) the minimum average cost. 20. If R(x) is the revenue that a company receives when it sells x units of a product, then the marginal revenue function is the derivative R'(x). The profit function is
In some countries, such as Canada and UK, direct-to-consumer (DTC) advertising for pharmaceutical products is illegal or tightly controlled. Which of the following is NOT a reason why DTC is tightly controlled?   Question 7 options:   Asymmetric information: consumers are not in a good position to determine if a drug is what they need.   DTC makes patients aware of new remedies.   DTC can put a strain on doctor-patient relationship when patients demand some drugs that are not necessary or not the best options.   DTC have the potential to drive up spending on drugs and exacerbate moral hazard.
People need medications, but the poor often cannot afford them. Governments may not provide subsidies for health care and medications. Meanwhile, biopharmaceutical firms focus their R&D on compounds likely to provide the best returns. What is the proper role of the following groups in addressing these dilemmas: national governments, branded biopharmaceutical firms, and generic manufacturers?
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