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Two Health Insurance Cases
(a) Jermaine has a health insurance policy that has a deductible of $1,000, a $10 copayment on doctor visits, and coinsurance of 10% on all expenses other than those for which there are copayments. If Jermaine went to the doctor 4 times (doctor's fee is $40 per visit) and had a surgery that cost $2,000, how much of these expenses did Jermaine pay directly?
(b) Elise has a health insurance policy that has a deductible of $500, a $20 copayment on doctor visits, and coinsurance of 10% on all expenses other than those for which there are copayments. She visited the doctor 4 times last year (doctor's fee is $40 per visit) and underwent a surgery that cost $3,000. If instead she had had a policy with a $1,000 deductible, a $10 copayment on doctor visits and no coinsurance, (excluding the cost of the insurance) would she pay more or less than with her actual policy? By roughly how much (give a range)?
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Suppose you are running a photo copy center that makes illegal copies of the textbook. An illegal copy of the book sells for $10 and you only have one copy machine.
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Karen earns $75,000 in the current period and will earn $75,000 in the future. Assuming that these are the only two periods, and that banks in her country borrow and lend at an interest rate r = 0, draw her inter-temporal budget constraint.
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