Purchases in a competitive health insurance market

Assignment Help Business Economics
Reference no: EM13854549

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: EM13854549

Questions Cloud

Graph the budget constraint : Jim sees commuting by bus and T as perfect substitutes (U = T + B), that is, he would exchange one commute by bus for one commute by T. The price of a bus ticket is $1.50 and the price of a T ticket is $2.00. Jim has $6.00 to spend on commuting. Grap..
What is the present worth of this investment : 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..
Marginal product of labor-marginal product of capital : For the following production functions: calculate marginal product of labor (L), marginal product of capital (K), and the technical rate of substitution. Identify if the production function exhibits constant, increasing, or decreasing returns to scal..
Identify the quantity demanded : 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..
Purchases in a competitive health insurance market : 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..
Different insurance policies : The following question provides some practice calculating the AFPs for different insurance policies. If the individual remains healthy (80% probability), she will consume $500 in medical care in the upcoming year. An insurance policy with a $1000 ded..
Elastic demand would be considered optional : Some economists argue that the price elasticity of demand can be used to determine whether a good or service is a luxury or a necessity. In medical case, a procedure with inelastic demand would be considered a medical necessity, while care with elast..
How the quantity and price of medical service : Use a supply-demand graph to demonstrate how the quantity and price of medical services are expected to be affected if we went from a world without insurance to a world where the government covered 90% of all medical costs. Assuming that prices are s..
Annuity-immediate makes monthly payments : A forty-year annuity-immediate makes monthly payments. During the first year the monthly payments are $100 each. The payments within each year are level; however, the monthly payments in each of the years two through forty are 4% higher than those in..

Reviews

Write a Review

Business Economics Questions & Answers

  Marginal cost is constant across firms

What happens to price and output in the Cournot, Bertrand, and Stackelberg models if marginal costs increase by 10 percent? The market demand is p = a-bQ and the marginal cost is constant across firms, i.e. mc1 = mc2 = c. You may consider for two fir..

  Q1 your cousin zenzo owns a painting company with fixed

q1. your cousin zenzo owns a painting company with fixed costs of p200 and the following schedule for variable

  Describe the impact of this event on the mark for apples

Assume consumer tastes shift toward the consumption of apples. Which of the following statements is an accurate description of the impact of this event on the market for apples.

  Vertical merger affect profit and consumer welfare

Suppose that a manufacturer is a monopolist in selling some product to a number of competitive retailers at wholesale price w. The manufacturer has marginal cost of $10 per unit. Each retailer pays w to the manufacturer and charges p for each unit it..

  What is the confidence interval

What is the 99% confidence interval for the difference between the two school's scores. (For consistency, let the difference d=A-B.) b. Suppose we want to perform a two-tailed test where H0 is that ?d=0. What is (approximately) the p-value of the ..

  Assuming that the tax rate on capital gains

Consider the case in which 100 adults each own an antique stamp, purchased for $1 each in 1972, and these individuals value the stamp. Each owner values the stamp differently, between $1 and $100

  Qpart 1in 2011 company xyz had sales of 345620million net

q.part 1in 2011 company xyz had sales of 345620million net working profit subsequent to taxes of 10250 million and

  Suppose the daily demand function for pizza in berkeley

Suppose the daily demand function for pizza in Berkeley is Q = 1,525 – 5P. The variable cost of making Q pizzas per day is C(Q) = 3Q + 0.01Q2 , there is a $100 fixed cost (which is avoidable in the long run), and the marginal cost is MC = 3 + 0.02Q.

  From the profit maximization perspective

From the profit maximization perspective, under which condition does it make sense to expand the level of output in the short-run?

  When does price ceiling become binding and what it create

Draw and show with boxes and appropriate labeling who bears which portion of taxes. When does a price ceiling become binding and what does it create? Show in the diagram.

  Manufacturing plant has estimated the variable cost

An apparel manufacturing plant has estimated the variable cost to be $21 per unit. Fixed costs are $1M per year. Forty percent of its business is with one preferred customer and the customer is charged at cost (without profit). The remaining 60% of t..

  Radioactive transportation accidents large number

Frequently result from radioactive transportation accidents due to the large number of such shipments

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd