The analysis surrounding Figure 10.5 assumes that a person receiving government health insurance is not allowed to purchase supplemental private insurance. Show how the diagram must be modified if, to the contrary, individuals can purchase additional health insurance cover-age. Another assumption behind the model is that government health insurance is “ free” in the sense that individuals do not pay any taxes for it. Show how the model must be modified if government health insurance is financed by taxes.
Answer to relevant QuestionsThe three panels in Figure 10.5 show instances in which health insurance either increases or stays the same with the introduction of government-provided insurance. Diagram a set of indifference curves that illustrates a ...In her novel Sense and Sensibility, Jane Austen wrote, “If you observe, people always live forever when there is any annuity to be paid them.” Relate this quotation to the issue of adverse selection in annuity markets. “ I don’t care how rich the very rich are. I care if they became rich in an unethical way, or if they use their riches in a particularly vulgar or revolting way. . . . I wouldn’t mind if they lost [their wealth] or had ...Sherry’s utility is US and her income is YS. Marsha’s utility is UM and her income is YM. Suppose it is the case that: Define the Pareto efficient redistribution, and explain why the concept is relevant in this ...Since the 1980s, individuals’ UI benefits have been subject to the federal personal income tax (but not Social Security taxes). However, in 2009, the taxation of UI benefits for certain individuals was temporarily ...
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