Log in
Economics
1
answer
0
watching
161
views
18 Sep 2018

The market for health care services can be examined using the tools of supply and demand. In this market, the quantity variable is the hours of health care services. Consumers demand health care services while doctors (or others) supply health care services. We will assume health care services are all of the same quality (so 1 hour of heath care service A is the same as 1 hour of health care service B). The market price is the price per hour of health care services (dollars per hour). Given this, suppose a law mandates that doctors cannot charge a price higher than Pmax, where this maximum price is set below the free-market equilibrium price in this market. What will be the effect of this law on the quantity demanded, quantity supplied and the price paid for health care services? Who benefits and who loses from imposing this maximum price that sellers can charge/receive for health care services? (Note: given the price actually paid by consumers for health care must equate supply and demand. This price can include both monetary forms of payment and non-monetary forms of payment; in this example, what forms might such non-monetary payments take? That is if health care must be "rationed" among consumers).

Watch
1
answer
0
watching
161
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

Question 11 One potential remedy to the tragedy of the commons is to: never allow a single individual to consume more than one percent of the common resource. criminalize the usage of common resources. allow individuals to use a common resource as long as they receive some benefit from doing so. place a common resource under private ownership. 4 points Question 12 As a result of a positional externality: contestants have a tendency to invest in a series of mutually offsetting investments in performance enhancement. there is generally an underinvestment in performance enhancement. the market price of performance enhancement materials is too high. the quality of performance in competitive situations is lower than the socially optimal level. 4 points Question 13 Which of the following statements is true regarding health insurance? Economics shows that all health related procedures should be free to individuals because the health of an individual is priceless. Total economic surplus would be larger if individuals faced an incentive to only use services when the benefit exceeds their costs. Health maintenance organizations provide an incentive for doctors to prescribe expensive nonessential services. First dollar insurance coverage has likely had very little to do with rising healthcare expenditures since World War II. 4 points Question 14 A strategy that yields a higher payoff no matter what the other players in the game choose is known as a: prisoner's strategy. dominated strategy. dominant strategy. Nash strategy. 4 points Question 15 Based on the diagram below, if the costs of hospital care are constant at $200 per day, and the individual does not incur any cost for each day for hospital care, then: the individual will stay 7 days and there will be no loss in economic surplus. the individual will stay 3 days and there will be no loss in economic surplus. the individual will stay 7 days and there will be lost economic surplus. the individual will stay 3 days and there will be lost economic surplus. 4 points Question 16 Economic research by Manning and colleagues suggests that people with deductible health insurance policies: spend substantially less on health care and have substantially worse health outcomes compared to people with first-dollar insurance coverage. spend substantially more on health care and have substantially better health outcomes compared to people with first-dollar insurance coverage. spend basically the same amount on health care and have substantially worse health outcomes compared to people with first-dollar insurance coverage. spend substantially less on health care and have no measurable difference in health outcomes compared to people with first-dollar insurance coverage. 4 points Question 17 An efficient program for reducing pollution is one for which: all polluters incur the same total costs of abatement. all polluters pay the same amount in taxes to the government. all polluters have the same marginal costs of abatement. all polluters reduce their emissions by the same amount. 4 points Question 18 Given the information on pollution abatement costs of the two firms shown below, which of the following is an efficient combination of pollution reduction? Quantity of pollution abatement Firm A's MC of abatement Firm B's MC of abatement 1 $30 $25 2 $35 $30 3 $40 $35 4 $45 $40 Firm A reduces by 1 ton and Firm B reduces by 1 ton. Firm A reduces by 2 tons and Firm B reduces by 3 tons. Firm A reduces by 4 tons and Firm B reduces by 1 ton. Firm A reduces by 3 tons and Firm B reduces by 2 tons. 4 points Question 19 All of the following are characteristics of perfectly competitive markets except: there are a large number of firms. productive resources are mobile. all firms produce a differentiated product. buyers and sellers are well informed. 4 points Question 20 An advantage of the auction method to pollution abatement is that: it is very expensive to firms. regulators can achieve a desired abatement target without having detailed knowledge of the abatement technologies available to polluters. it requires all firms to reduce by exactly the same amount. it assures that eventually society will reach a level of zero pollution emissions. 4 points Question 21 There are 2 firms each emitting 200 tons of a pollutant. Firm A's abatement costs are constant at $20/ton, and Firm B's abatement costs are constant at $40/ton. The government's goal is to reduce pollution by half. If the government auctions 200 one ton permits to the highest bidder: Firm A will purchase all 200 permits. Firm B will purchase all 200 permits. each firm will buy 100 tons. there is no way to know who the highest bidder for any permit would equal. 4 points Question 22 As a result of economies of scale, as output expands: fixed costs are decreasing. average total costs are decreasing. marginal costs are increasing. total costs are decreasing. 4 points Question 23 Generally, when countries open their borders to free trade: both domestic producers and consumers of imported goods gain. both domestic producers and consumers of exported goods gain. domestic producers of imported goods and domestic consumers of exported goods gain. domestic producers of exported goods and domestic consumers of imported goods gain. 4 points Question 24 Which of the following is the best example of a tariff? South Korea bans imports of U.S. beef because of safety concerns. The U.S. requires toys imported from China to undergo testing for lead content. The U.S. imposes a tax on sugar imported from Brazil. The U.S. restricts the quantity of cars imported from Japan. 4 points Question 25 A means-tested program is a benefit program: in which benefits decline as a recipient's earned income increases. in which all individuals must undergo health screening to be eligible for benefits. in which all recipients exclusively receive benefits through in-kind transfers. that only affects the average income of a specific segment of the population. 4 points Save and Submit Click Save and Submit to save and submit. Click Save All Answers to save all answers.

A monopolist sells travel services to two groups of people with the following demand curves Q1 = 100 - 2P1 (and MR1 = 50 - Q1) and Q2 = 60 -P2 (and MR2 = 60 -2Q2) . The marginal cost of providing one unit of travel service to either of the groups is the same for the monopolist, i.e., MC = $10 per unit.

(a) Identify whether group 1 or group 2 has more elastic demand.

(b) If the monopolist can price discriminate, then what prices would the monopolist charge the two groups for travel services? What quantities will the monopolist sell to each group?

(c) Suppose the monopolist is forced to charge a single price to all consumers regardless of which group they belong to. What is the profit maximizing price and quantity? Who benefits from this policy? Who loses?

(d) What would be equilibrium price and quantity if the market was competitive?

Question 1

The shortage in apartments causes by rent control is worse...

In the long-run, because the long-run supply is more elastic.

In the long-run, because the long-run supply is less elastic.

In the short-run, because the short-run supply is more elastic.

In the short-run, because the short-run supply is less elastic.

2 points

Question 2

Airline regulation of the 1970s produced a similar result to which of the following government interventions?

Communism

Rent control laws

The Affordable Care Act

Minimum wage laws

2 points

Question 3

What is a price floor?

A maximum price allowed by law.

A minimum price allowed by law.

A maximum price consumers are willing to pay.

A minimum price consumers are willing to pay.

2 points

Question 4

In 1938, Congress set the first minimum wage at $0.25 per hour. While this was a modest price floor for the country, it was a very large increase for what US territory which was not exempt from the law?

Arizona

Puerto Rico

Cuba

Hawaii

2 points

Question 5

Which of the following is a possible effect of a price ceiling?

A surplus of the good.

Increases in product quality.

Increased gains from trade.

People will waste time in lines waiting to purchase the good.

2 points

Question 6

Which of the following is a possible effect of a price floor?

Decreases in product quality.

The quantity supplied exceeds the quantity demanded.

Increased gains from trade.

A shortage of the good.

2 points

Question 7

Which of the following is a possible effect of a price ceiling?

Increased gains from trade.

Increases in product quality.

A surplus of the good.

The quantity demanded exceeds the quantity supplied.

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in