Please answer all mcqs. If you answered incompletely, I will give you a negative rating and you will… Show more Please answer all mcqs. If you answered incompletely, I will give you a negative rating and you will be removed off the platform. 7. Which of the following are supported by Keynesian economics? I. Markets always work. II. The economy is self-correcting. III. Demand side matters. IV. Government intervention can be necessary to restore full employment. a. I and II b. II and III c. III and IV d. I, II, and III e. II, III, and IV f. I, II, III, and IV 8. Classical economists believe that savings is ____________, while Keynesian economists believe that savings is ____________. a. a drain on demand; crucial to growth b. crucial to growth; a drain on demand c. Both believe that savings is crucial to growth. d. Both believe that savings is a drain on demand. 9. During the 2008–9 Great Recession, the Obama administration proposed several stimulus packages with an aim to recover the economy from the economic crisis. Which school of thought will most likely support the administration’s policy prescriptions? a. Keynesian b. Classical c. Both Keynesian and classical d. Neither Keynesian nor classical Please answer all mcqs. If you answered incompletely, I will give you a negative rating and you will be removed off the platform. • Show less

Assume that only one health condition ever afflicts people for which one treatment is available, cos… Show more Assume that only one health condition ever afflicts people for which one treatment is available, costing $100,000. The condition is very bad, so all consumers would be willing to pay for the treatment even if they did not have insurance. Consumers differ in their risk of being afflicted by the condition. Specifically, “healthy types” have a 1% chance of being afflicted, while “sickies” have an 11% probability, with an equal number of each type in the population. For each of the following scenarios, calculate the premium (or premiums) for full insurance you would expect in a competitive market, and explain which consumers would be expected to purchase full insurance. Assume all consumers are risk-averse and only full insurance policies are available. Assume also that everyone (consumers and insurers) know the information above.  Scenario 1: Neither consumers nor insurers know anybody’s risk type.  Scenario 2: Consumers all know their own risk type, but insurers do not know the risk type of individual consumers.  Scenario 3: All consumers and insurers know everyone’s risk type.  Scenario 4: Same as Scenario 3, except “community rating” laws prevent insurers from charging different premiums to different consumers, and “guaranteed issues” laws prevent insurers from denying coverage to anyone. (I.e. full insurance must be offered to everyone at the same premium, regardless of their risk type.)  Scenario 5: Same as Scenario 4, but consumers are legally required to purchase full insurance. Which scenarios lead to efficient outcomes in the insurance market? Why might someone prefer one efficient outcome over another? • Show less

The following question provides some practice calculating the AFPs for different insurance policies…. Show more The following question provides some practice calculating the AFPs for different insurance policies. If the individual remains healthy (80% probability), she will consume $500 in medical care in the upcoming year. If the individual is afflicted by a moderate health condition (15% probability), she will consume $5000 in medical care. If the individual is afflicted with a serious condition (5% probability), she will consume $101,000 in medical care. Calculate the AFP for this person under each type of insurance described below. a. An insurance policy with a $1000 deductible and no coinsurance (i.e. every dollar of HC spending beyond the $1000 deductible is fully covered by the insurance). b. An insurance policy with a $1000 deductible and a coinsurance rate of 20%. c. An insurance policy with a $1000 deductible, a coinsurance rate of 20%, and a catastrophic cap of $10,000. • Show less

Please answer all mcqs. If you didn’t answer completely, I will give you a negative rating and you w… Show more Please answer all mcqs. If you didn’t answer completely, I will give you a negative rating and you wil be removed off the platform. 6. Classical economists focus on the ___________, while Keynesian economists focus on the ____________. a. short run; long run b. long run; short run c. Both focus on the short run. d. Both focus on the long run. e. Time period is not the essence of the debate between classical and Keynesian economists Please answer all mcqs. If you didn’t answer completely, I will give you a negative rating and you wil be removed off the platform. • Show less

With the existence of health insurance, the out-of-pocket price most HC patients face is only a frac… Show more With the existence of health insurance, the out-of-pocket price most HC patients face is only a fraction of the full price for the HC services they consume. Consider a patient whose health benefits (measured by her willingness-to-pay) from different quantities of HC services are as follows: Health Care Quantity Health Benefit ($) 1 $1400 2 $2200 3 $2500 4 $2700 5 $2750 6 $2775 7 $2780 a. If providers charge $100 per quantity unit, what quantity would the patient purchase if she is fully informed about the health benefits produced by different levels of treatment and had no insurance? b.What if the patient is covered by a health insurance policy that pays 90% of all HC expenses (i.e. a 10% coinsurance rate)? Assuming the price of health care ($100/unit) reflects its true marginal cost, quantify the “efficiency loss” (decrease in economic surplus) resulting from the patient’s treatment choice when insured. c. Suppose the patient relies on her physician to determine the appropriate level of care she should receive. Assume also that physicians’ incomes increase when they provide more services. If the physician is a “good agent” for her patient (recommends the treatment an informed patient would want), what quantity of services will she recommend? If the physician is interested in maximizing her income, how many services will she recommend? d.True or false: A physician operating as a good agent for their patient will only provide services when it is efficient to do so. • Show less

ome economists argue that the price elasticity of demand can be used to determine whether a good or… Show more ome economists argue that the price elasticity of demand can be used to determine whether a good or service is a luxury or a necessity. In medical case, a procedure with inelastic demand would be considered a medical necessity, while care with elastic demand would be considered optional (or elective). Is price elasticity of demand a good way to gauge which procedures are more medically necessary than others? Explain. • Show less

to demonstrate how the quantity and price of medical services are expected… Show more Use a supply-demand graph to demonstrate how the quantity and price of medical services are expected to be affected if we went from a world without insurance to a world where the government covered 90% of all medical costs. Assuming that prices are set competitively (i.e. set equal to MC of producing services), show in the graph how we could measure the “efficiency loss” (or deadweight loss) associated with health care over-consumption. Does the existence of this “efficiency loss” mean that citizens are worse off with the government’s provision of this insurance? • Show less

7. A forty-year annuity-immediate makes monthly payments. During the first year the monthly payments

25 years age group. It is th… Show more A publisher is considering launching a new magazine for women in the 18–25 years age group. It is thought to be vital to the long-term success of the magazine that its sales should reach break-even point within its first year. When asked to make an estimate of the risk of this target not being achieved, the marketing manager, after some thought, states that she thinks the risk is only about 1 in 10. (a) Sketch out the key features of a risk analysis model which might be appropriate for this estimate and explain how the estimate would be obtained from the model. (b) Suppose that your risk analysis model suggests that the risk of not achieving the target is about 1 in 4. Explain why the estimate from the model might differ from the ‘holistic’ estimate of the marketing manager and discuss how the conflict might be resolved • Show less

In a particular competitive market, the sellers have private marginal cost (PMC) equal to 2.5 at eve… Show more In a particular competitive market, the sellers have private marginal cost (PMC) equal to 2.5 at every output level. The demand curve has the equation P = 52.5 − (5Q/2), where Q ≤ 21 is the quantity bought at price P ≤ 52.5. a. Graph the demand curve in this market for prices in the range 0 ≤ P ≤ 15. b. In the graph of part a, plot the supply curve in this market for prices 0 ≤ P ≤ 15 and quantities of output in the range 0 ≤ Q ≤ 25. Explain why the supply curve looks the way you drew it. c. Find the competitive equilibrium price Pc and quantity Qc, explaining all your steps. Show Pc and Qc in the graph. d. Explain how we can tell that the competitive equilibrium quantity maximizes total surplus in this market if marginal damage from trading of the output equals 0 at every output level. e. The supply and demand curves in your graph of part a seem to match which one of the following markets most closely? (e1) the US market for fresh sweet corn during a harvest month; (e2) the world market for gasoline during a summer month; (e3) the market for gasoline in New York state during a particular summer month; (e4) the market for gasoline sold by a single gas station during a summer month. Justify your answer. In the remaining parts of this problem, assume that marginal damage from trade of the output in this market is MD(Q) = 0 for 0 ≤ Q ≤ 11 and is MD(Q) = 2Q − 22 for Q > 11. f. In the market you picked in part e, what might be the source or sources of this marginal damage? g. Graph the new social marginal cost (SMC) curve in your graph of part a. Find the new efficient output level Qe that maximizes total surplus in this market. Show your work in computing Qe and label it in your graph. h. Find a unit tax T charged to sellers in this market that makes the competitive equilibrium output quantity with tax Qe. Find the market price when this tax is charged and show it in your graph, labeled PT . i. Suppose that instead of charging a tax, a gov requires sellers in this market to buy a permit for each unit of output they sell. How many permits should the gov make available for sale in order to have Qe, the efficient number of units, sold? When the gov sells this many permits, what is the new equilibrium price of output that is charged to buyers in this market? What is the price of a permit, assuming the permits are sold in a competitive market? Explain your answers. j. What is the effect of the permit requirement in part i on the competitive equilibrium total profit of the sellers in this market? Explain. k. Suppose that the gov has a fairly good estimate of the marginal damage (MD) curve in this market, but cannot tell exactly where the demand curve is, though they do know how many units are sold before they intervene in the market. Which policy (tax or permit requirement) is more likely to make output in the market closer to the efficient level Qe? Explain. • Show less