- Question 1 10 Points Consider A Healthcare Good For Which Demand And Supply Are Described By The Following Equations 1 (74.83 KiB) Viewed 14 times
- Question 1 10 Points Consider A Healthcare Good For Which Demand And Supply Are Described By The Following Equations 2 (48.76 KiB) Viewed 14 times
- Question 1 10 Points Consider A Healthcare Good For Which Demand And Supply Are Described By The Following Equations 3 (72.61 KiB) Viewed 14 times
- Question 1 10 Points Consider A Healthcare Good For Which Demand And Supply Are Described By The Following Equations 4 (37.87 KiB) Viewed 14 times
Question 2 (10 points) Consider the following equations for the demand and supply for a healthcare product/service: P=4500-Q P=500+3Q (For all of the following questions the answers are integers, do not use comma if you want to write in numbers larger than 1000). 1) What is the initial equilibrium quantity? (Type the number into the first box) (1 pt) 2) What is the initial equilibrium price? (Type the number into the second box) (1 pt) Now consider that there is an insurance that has a 20% coinsurance rate. 3) What is the new equilibrium quantity? (Type the number into the third box) (2 pts) 4) What is the new equilibrium price? (Type the number into the fourth box) (2 pts) 5) What is the deadweight loss due to this insurance? (Type the number into the fifth box) (4 pts)
A risk averse individual has an initial wealth of $23,000. His utility of wealth can be described by the following function: U(W)=36*W04, where U is for utility and Wis for wealth. If the individual turns sick, he/she loses $8,000. The probability of staying healthy is 85% and the probability of turning sick is 15%. When answering the following three questions only round the numbers that you type into the answer boxes below. Once you have to use a number for further calculations that you used as an answer, keep using the rounded value that you typed in as an answer. 1) What is the individual's Expected wealth (in dollar, but only write in the number in the first box, do not use commas and dollar signs)? (1 pt) 2) What is the individual's expected utility (write in the rounded whole value into the second box, do not use commas)? (2 pts) 3) Work with the rounded value from problem 2 to answer the following question: What is the maximum amount this individual would be willing to pay to avoid this 'gamble' (only write in the rounded whole value number in the third box, do not use commas and dollar signs)? (3 pts)
A physician's office faces a demand of Visits = 1000 - 5*Price. 1) Revenue is smallest when Price equals $70. 2) Revenue is highest when Price equals $70. 3) Cutting Price from $100 to $90 will increase sales and revenue. 4) Raising Price from $80 to $90 will reduce sales but increase revenue. 5) None of the above.