Operates to affect relative price of more complete coverage

Assignment Help Business Economics

Reference no: EM13862660

Jim currently pays premium $P for his health insurance, which he purchases in a competitive health insurance market, and covers 80% of all his healthcare costs (i.e. 20% coinsurance rate; no deductible or catastrophic cap). If he were to instead purchase insurance that covers 90% of his healthcare costs, the premium would be expected to increase for three reasons. What are those three reasons, and explain how each operates to affect the relative price of more complete coverage.

Reference no: EM13862660

Questions Cloud

Attractiveness of investment based on present worth : Eddie's Precision machine shop is insured for $700,000. The present yearly insurance premium is $1.00 per $100 of coverage. A sprinkler system with an estimated life of 20 years and no salvage value can be installed for $20,000. what is the present w..

What is incremental revenue associated with price reduction : Suppose this action will increase sales to 318,000 jars of sauce. What is the incremental revenue associated with the price reduction of sauce?

Trevor consumes two goods-total change in quantity demanded : Trevor consumes two goods: fruit (good x) and vegetables (good y). His demand for fruit is given by x(px,m)=.04m-4.24px. His income is $322, the price of fruit is $2, the price of vegetables is $1. If the price of vegetables rises to $3, calculate to..

Demand function for oysters given by the equation : Terry has a demand function for oysters given by the equation q=.02m-2p, where m is income and p is price. Terry's income is $8,000 and he initially has to pay a price of $40 per oyster. Assume the price of oysters rises to $80. Calculate the substit..

Operates to affect relative price of more complete coverage : Jim currently pays premium $P for his health insurance, which he purchases in a competitive health insurance market, and covers 80% of all his healthcare costs (i.e. 20% coinsurance rate; no deductible or catastrophic cap). If he were to instead purc..

Business systems plan-strategic information systems : Based on the information contained in the Business Systems Plan and the Strategic Information Systems Assessment, write an IT strategy statement that details the following:

Lead to efficient outcomes in insurance market : Assume that only one health condition ever afflicts people for which one treatment is available, costing $100,000. The condition is very bad, so all consumers would be willing to pay for the treatment even if they did not have insurance. Consumers al..

What are some of the worst jobs you know about : What are some of the worst jobs you know about? Why are they bad jobs? Why do some people want these jobs

What effect does the tax on a good have on buyers and seller : What effect does the tax on a good have on buyers and sellers of the good?

User Account

All Pages