Show how a consumer would choose between medical care and health(y) behavior activities using the graphical representation of the consumer choice model (assume that “amounts” of healthy behavior have “costs” or prices). How might health education affect this choice? What if medical care becomes more productive (more health benefit per “unit” of medical care consumed)? What if medical care becomes cheaper? Explain in terms of the model (i.e. what does it change in the model).
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Show how a consumer would choose between medical care and health(y) behavior activities using the graphical representation of the consumer choice model (assume that “amounts” of healthy behavior have “costs” or prices). How might health education affect this choice? What if medical care becomes more productive (more health benefit per “unit” of medical care consumed)? What if medical care becomes cheaper? Explain in terms of the model (i.e. what does it change in the model).
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- Show how a consumer would choose between medical care and health(y) behavior activities using the graphical representation of the consumer choice model (assume that “amounts” of healthy behavior have “costs” or prices).An individual has the following utility function: U = Z!/2 H/2, where Z is a composite good and H is the level of health. The individual has income, m = $100. The price of the composite good, Z, is Pz = 1. The price of health, H, is PH = 4. What is the optimal consumption bundle of H and Z that maximizes utility? Show your steps and show the decision graphically (which includes finding the endpoints of the budget constraint).A recent trend in health insurance is the Health Savings Account (HSA). The idea behind Health Savings Accounts is that rather than providing employees with health insurance that makes visiting doctors cost little more than a simple $10 or $20 copay the employer gives the employee money to use to spend on health care, but the employee bares the entire cost of seeing the doctor. What money given for health care not spent by the employee can be withdrawn by the employee as if it was additional income. It is believed that Health Savings Accounts will reduce the total amount of money spent on seeing doctors. Using Supply and Demand analysis, explain why there is the expectation that HSA’s will reduce spending on doctors.
- Draw a market where consumers demand health insurance and insurance companies supply insurance at a price of insurance called the premium. Explain why, in this model of the insurance market, the individual mandate (the mandate is everyone has to have insurance) will cause health insurance premiums to increase.What is the difference, if any, between “Pharmacoeconomics” and “Health Economics”? Explain how microeconomics and macroeconomics are relevant to this field of study and support your answer with plausible examples. Based on your answer, illustrate why studying Pharmacoeconomics has become inevitable and remarkably essential in healthcare provision nowadays.Use the black point (plus symbol) to indicate the quantity of procedures ded if each procedure has a price of $100. Then use the grey point Consider how health insurance affects the quantity of health care services performed. Suppose that the typical medical procedure has a cost of $100, yet a person with health insurance pays only $20 out of pocket. Her insurance company pays the remaining $80. (The insurance company recoups the $80 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undergo.) (star symbol) to indicate the quantity of procedures demanded if each procedure has a price of 520. 200 180 Q at P-$100 160 140 120 Q, at P=$20 100 20 60 40 Demand 30 40 50 80 70 801 90 100 Quantity of Medical Procedures 20 10 20 Price of Medical Procedures
- Suppose that you have data at the individual level that includes information on the price of a doctor visit an individual and the number of doctor visits they go to in a given year. For simplicity, let's say that those with more generous plans pay less for a doctor's visit, while those with less generous plans pay more for a visit. You graph the relationship between the price individual pays for doctor visits against the number of visits, and you see a downward sloping line; let's call this "measured demand." The problem of "endogeneity" discussed this week could arise here if individuals who know they go to the doctor frequently buy_ generous coverage while those who know they rarely go to the generous coverage. This would imply that the "measured" demand curve is doctor purchase. more elastic than the "true" demand curve. more; less more; more less; less less; moreMartha spends 5 hours of free time exercising and playing music per day. The table below represents the level of utility she receives from the various combinations of exercise and music activities. For instance, if she only plays music, her total utility from exercise will be 0, and the utility from music will be 50. If she exercises for 1 hour, she will receive a level of utility of 25. Utility is measured in 'utils'; those numbers are arbitrary and designed to quantify the benefits received from various actions. Utility Utility from from Exercise Music 50 utils O utils from O hours of exercise from 5 hours of music 25 utils for 1 hours of 45 utils from 4 hours of exercise music 40 35 45 20 50 The utility patterns in the table illustrate the law of marginal diminishing utility because ... The total utility Martha receives from music decreases The increase in utility for each additional hour Martha exercises falls The total utility Martha receives from exercise decreases Martha…Suppose that you have data at the individual level that includes information on the price of a doctor visit an individual and the number of doctor visits they go to in a given year. For simplicity, let's say that those with more generous plans pay less for a doctor's visit, while those with less generous plans pay more for a visit. You graph the relationship between the price individual pays for doctor visits against the number of visits, and you see a downward sloping line; let's call this "measured demand." The problem of "endogeneity" discussed this week could arise here if individuals who know they go to the doctor frequently buy more generous coverage while those who know they rarely go to the doctor purchase less generous coverage. This would imply that the "true" demand curve (if we were to account for endogeneity) is_________ the same as. less inelastic than the measured demand curve. more inelastic than the measured demand curve.
- Martha spends 5 hours of free time exercising and playing music per day. The table below represents the level of utility she receives from the various combinations of exercise and music activities. For instance, if she only plays music, her total utility from exercise will be 0, and the utility from music will be 50. If she exercises for 1 hour, she will receive a level of utility of 25. Utility is measured in ‘utils’; those numbers are arbitrary and designed to quantify the benefits received from various actions. Utility for Exercise Utility from Music 0 utils from 0 hours of exercise 50 utils from 5 hours of music 25 utils for 1 hours of exercise 45 utils from 4 hours of music 40 35 45 20 50 0 Marginal analysis will help Martha in her decision making regarding how to spend her free time because ... All answers are correct. She will realize which activity is more important to her. She will be able to find the combination of music and exercise which gives…Suppose there is a new preventative treatment for a common disease. If you take the preventative treatment, it reduces the average amount of time you spend sick by 10%. The optimal combination of Z (home goods) and H (health goods) _____. Suppose there is a new preventative treatment for a common disease. If you take the preventative treatment, it reduces the average amount of time you spend sick by 10%. The optimal combination of Z (home goods) and H (health goods) _____. a. both may decrease b. H may increase; Z may not change c. both may increase or one may stay the same while the other increases. d. Z may increase; H may decrease e. both may increaseSuppose that income causes health in the following specific manner: h = 2.25y and that health aids income as follows: y = 6 + 3h Based on this information, answer the following: a. Graph the two functions on the (y, h) graph and show the equilibrium (y on the x axis and h on the y axis). b. Derive the equilibrium pair (y*, h*) and show on the graph above. 7 c Now suppose that access to health is segmented by income in this country so that: h= 2 + .25y for all y 50 Derive the new equilibrium and redraw the graphs again in the (y, h) space and depict the old and new equilibria.