Suppose that the demand curve D m for medical services can be characterized by the equation M = 2000 - P, where M is the amount of medical services received per year and P is the price. Suppose further that P 0 is constant at 800.
(a) Find the equilibrium quantity of services at P 0 .
(b) Find the equilibrium quantity of services when there is only a co-payment of 20% required
such that the price is 0.2P 0 .
(c) How much additional expenditures induced by insurance are created?
(a) At a price of $800, M = 2,000 - 800 = 1,200.
(b) To find the answer, we need 0.2(800) = 160. Therefore, 2,000 - 160 = 1,840.
(c) The area we want which is 800(1,840 - 1,200) = 512,000.
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A) domestic assets. B) only silver. C) only copper. D) national currency. E) foreign currencies.
Prior to and during the period of American colonization, the following occurred in Europe:
(a) Feudal rulers found it easy to force peasants and urban producers to work for them as long-distance trade expanded, the costs of warfare increased, and the land/labor ratio increased as consequence of the bubonic plague. (b) Feudal lords shared profits from output with the peasantry and pumped them into investment expenditures, which accelerated agricultural growth. (c) Conflict among lords and peasants led to many peasant and urban revolts, diverting resources away from production and investment. (d) Financial stability enabled the nobility of Europe to foster growth among feudal lands and increase the riches of both rulers and peasants, producing a period of high economic growth.
The CPI equals 1.00 in year one and 1.05 in year two. If the nominal wage is $15 in year one and a contract calls for the wage to be indexed to the CPI, what will be the nominal wage in year two?
A. $15.00 B. $15.75 C. $14.29 D. $16.05
If milk and cookies are complements, then their cross price elasticity of demand will be
A) elastic. B) greater than zero but less than 1. C) negative. D) positive.