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Assignment:
Based on the Grossman model, how do you expect the following policies to affect an individual's optimal level of health capital? Explain carefully for each one, making sure to outline possibly contradictory effects.
(a) Increase in the generosity of Canada's paid sick leave program.
(b) Adoption of a two-tier system for the financing of services previously insured under provincial health care plans. For instance, people can now pay privately to see a primary care physician instead of waiting to see one paid for by the public health insurance plan.
(c) Interest rate hikes by the Bank of Canada.
(d) Adoption of a user-friendly centralized electronic medical records system. Patients can now easily access all of their health information and test results, along with corresponding explanations presented in simple, accessible language.
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