Nearly 6.4 million Americans selected Obamacare policies through the federal exchange for coverage during 2016 and it is expected that a total of 13.8 million people will sign up for plans through both the federal and state exchanges by the end of the enrollment period.

a. If the Obamacare enrollment is the efficient quantity of families, how would that quantity have been determined?

b. Draw a graph to illustrate the health-insurance market and illustrate how the Obamacare subsidy influences the number of families covered.

c. How would the demand for health insurance change if the penalty for not signing up for Obamacare were abolished? Draw a graph to illustrate the outcome