We have read that the uninsured and the insured behave differently in regard to medical services. Suppose that the insured have a demand curve that can be written as Q = 100 - P, where Q is the quantity of medical services and P is the price. Suppose further that the uninsured have a demand curve that can be written as Q = 100 - 2P.
(a) At a price of $10 of medical services, how much will each demand?
(b) At a quantity of 50 units, how much will the price be for the insured and uninsured?
(a) For insured at a price of $10, we have Q i = 100 - 10 = 90. For the uninsured at a price of
$10, we have Q u = 100 - 2 * 10 = 80.
(b) For the insured at a quantity of 50, we have 50 = 100 - P i , P i = 50. For the uninsured at a
quantity of 50, we have 50 = 100 - 2P u , P u = 25.
You might also like to view...
What effect does an increase in real GDP have on the demand for money?
What will be an ideal response?
Interest-rate risk is the riskiness of an asset's returns due to
A) interest-rate changes. B) changes in the coupon rate. C) default of the borrower. D) changes in the asset's maturity.
Short run refers to a period of time during which:
a. all the factors are constant. b. all the factors are variable. c. the producer can shift from one plant size to another. d. some factors are fixed while some others are variable. e. the producer cannot change the level of output.
Suppose we are given that the value of a particular utility function is a constant. That is, U(X,Y) = c. Then, the total derivative of this relation is:
A. (?U/?X)dX + (?U/?Y)dY = c. B. (?U/?X)dX + (?U/?Y)dY = 0. C. (?Y/?X)dU + (?X/?Y)dU = c. D. (?Y/?X)dX + (?X/?Y)dY = 0.