Questions and Answers of The Economics Of Health And Health Care

How might the development of the NFL and MLB have been different if blacks had not been excluded from these leagues during the years that spanned World War II?
If implementing Title IX means that men’s sports must experience a reduction in funding, should it be eliminated?
Discuss the implications of a government policy that any network that intends to cover the Olympics must devote equal air time to men’s and women’s events.
Suppose the competitive salary in independent league baseball is $20,000 per season.One team owner has a taste for discrimination against all nonwhite players. Her coefficient of discrimination
How can you determine if a running back in the NFL is suffering from wage discrimination?Would the process be the same for a lineman?
Under what circumstances would an owner be able to practice employer discrimination over a long period of time?
Suppose that the supply of both Hispanic and white pitchers (of equal quality) were perfectly elastic. Using supply and demand graphs, show the number of each player type hired by an owner with a
Use Becker’s model to explain why sponsors who discriminate will likely experience lower profits for doing so.
Is discrimination by referees best characterized as employer discrimination, employee discrimination, customer discrimination, or none of these? Explain your reasoning.
Using supply and demand graphs, show how positional segregation can occur even if only the players (including potential future players) believe that such discrimination exists.
Use what you know about the prisoner’s dilemma to explain why the English Premier League teams such as Arsenal have so many foreign players even when, as a group, the Premier League teams agree
Discuss the viability of amateurism in the United States today. Is it possible, given the attention that elite athletes receive, to have “pure” amateurs?
Should college athletes be paid? If not, why not? If so, what is the appropriate payment scheme?
Does the athletic department at your college make a profit? Does it profit even when transfers—such as student fees—are deducted? If it lost money, what—if anything—should be done?
If your college were invited to the New Mexico Bowl, would you favor accepting the bid? Why or why not?
Are head football and basketball coaches worth the money they are paid?
Show, using supply and demand for labor diagrams for Divisions I and III, the effect of a new rule allowing Division III schools to pay athletes a one-time bonus for enrolling at their schools.
Use MC and MR curves to show why the BCS schools claimed a larger share of bowl and TV revenues than non-BCS schools.
Use human capital theory to explain why colleges might not pay students their full marginal product.
Assume that you are the newly appointed head of the NCAA. Construct a frame- work for a new scholarship program that would entirely replace the existing system. Describe what should be its
What effect do the following have on a person's decision to invest in athletic training versus academic training? In each case, explain the direction and likely significance of the effect.a. Risk of
Use game theory to describe how an effort by two universities to recruit a top basketball player might result in both committing NCAA recruiting violations.
What unselfish and selfish motives might be behind the attempts by some schools to set academic standards for student-athletes?
Use supply and demand analysis to show and describe the dramatic increase in "basketball academy" prep schools in response to higher academic standards.
How might failing to graduate from college be an optimal investment in one's human capital?
Use human capital theory to explain why graduation rates for women's basketball players are so much higher than those for men's basketball players
Suggest several reasons why health care spending is higher in the United States than in other countries. Is the fact that the U.S. population spends more per capita on health care than people in any
Describe several key issues facing policymakers with regard to health care spending.
If greater health care spending leads to more jobs, why is there such concern about the rapid growth rates of spending?
Do consumers take the net price (including insurance and time) they face into consideration when choosing health care? What evidence suggests that price matters? Suggest real-life scenarios in which
Suppose that a woman works 40 hours per week with no opportunity for overtime. She also takes care of a sick parent. Can we say that her time has no value in providing this health care because she
What is meant by marginal analysis? Provide an example in which marginal analysis is useful in looking at policy questions.
Give three examples of quality of care in the provision of health services. Why might consumers be willing to pay more money to have each of them?
Describe the size of the health economy when measured by the quantities of capital and labor used to produce health care. What important inputs to the production of health are not being counted among
Health care spending ( S ) can be summarized by the following equation:S = (population size) × (health care quantity per person) × (price per unit of health care)(a) Identify three factors that
Identify fi ve distinctive features of the health economy. Examine each one separately, and describe other commodities or sectors that share those features. Do any other commodities or sectors have
In Table 1.1, calculate which countries had the largest and smallest percentage increases in GDP share from 1960 to 1980. Compare these to similar calculations for the period 1980 to 2015. Discuss
The United States, Canada, and the United Kingdom share the same language but have considerably different health care systems. Compare the health shares of GDP from 1960 to 2015. Use Table 1.1 to
Table 1.4 provides indexes of the prices of health care inputs. Calculate the growth rates between 1980 and 2014 of the prices of hospital and physician services. Compare them to the growth rate of
In Table 1.5, examine the private health insurance, Medicare, and Medicaid components.Which category grew the most between 1970 and 2014? Between 2000 and 2014? What factors might have led to the
Several websites provide useful information on health care and health resources use. Use a Web browser to fi nd sites of:Centers for Medicare & Medicaid Services (CMS)National Institutes of Health
The following chart shows health expenditures for the United States between 1960 and 2014. Using a spreadsheet program:(a) Calculate health expenditures per person for each year.(b) Calculate
Explain the difference between cardinal and ordinal utility. Do you think that it is possible for researchers to fi nd out which type of utility people actually have?
If a consumer always prefers more to less, can the indifference curves between the two goods be upward sloping? Explain. What if one of the “goods” is actually something unpleasant, like broccoli
The law of diminishing marginal returns states that eventually the marginal product of an input will tend to fall as more input is added. Describe real-life scenarios, explaining why this is likely
If it makes sense that one type of labor can substitute for another in production, how can capital, a physical object, substitute for labor, a human being?
Describe the long-run equilibrium of the competitive fi rm. Conceptually remove a single assumption of perfect competition and analyze whether and how the process of long-run equilibrium would
When a welfare loss occurs because of monopoly, what exactly is lost? Who loses it?
Resolve the following: “The price of ice cream increased in the summer, yet quantity also increased. Therefore, the law of demand does not apply to ice cream.”
How is a production function affected by the invention of a new process related to it? Can this change result in lower prices to the consumer? What do you think? Do improvements in technological
Draw a production possibilities curve for an economy that produces two goods, health and entertainment. Show how this PPF would change if the technology for improving peoples’ health was to
Draw a production possibilities curve between health and all other goods. Insert a point in the drawing that illustrates an economy with an ineffi cient health system. Insert two additional points
Using a supply-and-demand graph and assuming competitive markets, show and explain the effect on equilibrium price and quantity of the following:(a) A technological change that reduces the cost of
Graph the following demand functions:(a) Qd = 110 – 3.3 P(b) Qd = 100 P –1.3
In a graph with OG on the vertical axis and Food on the horizontal, what is the Foodaxis intercept? How does the budget constraint shift if the consumer’s income level and the two prices all double?
Calculate the price elasticity for a $1 change in price at initial price level $300 for the demand function Qd = 1,500 – 1.5 P .
What is the slope of the isoquant described by the data in Table 2.5 when evaluated from a labor input of 7 to 8? Q Table 2.5 An Isoquant Schedule K L 10 10 10 10 10 10 11 10 10 1578022 100,000.00
Assume that a monopoly fi rm has a linear demand curve and a constant marginal cost curve. Graph this fi rm’s optimal output choice before and after a per-unit excise tax is placed on the output.
Using equation (2.4), what is the demand equation as a function of Ps if the price of other pastas ( P o ) is $3, the individual’s income ( Y ) in thousands is $25, and tastes ( Z ) are represented
Colorado legalized the recreational use of marijuana in 2014 to raise revenues through sales and excise taxes. In Denver, 1/8 ounce of marijuana costing $30 had about $8 in various taxes added on.
List at least three ways in which natural experiments differ from laboratory experiments.
What is the difference between a simple hypothesis and a composite hypothesis? Why might economists choose one over another?
In considering the difference in smoking between men and women, what is the null hypothesis? What is the alternative hypothesis? Is the alternative hypothesis simple or composite?
Suppose that we wish to compare the health status of two groups of people. What variable might we use to measure the status? What variables might we wish to control in order to draw the appropriate
If someone reports that the mean weight for fourth-grade boys is 80 pounds and for fourth-grade girls is 78 pounds, what must you know to test hypotheses using the difference of means?
If we are trying to relate output to labor inputs and capital inputs using regression analysis, would we expect the coeffi cients of the regressions to be positive or negative? Why?
What are dummy variables? How are they useful in identifying differences among groups?
Suppose that you used regression methods to estimate the demand curve for physician visits and found a positive relationship: that is, you found that the higher the price is, the more visits are
Rich people consume more health care services than poor people. Explain two ways one might test this hypothesis.
If we divide the population into two groups, up to age 35 and over age 35, which group purchases more aspirin?Now consider questions 1 to 4:Q = Quantity (in 100s) of aspirin purchased in a yearP =
Divide the population into three groups—up to age 30, over 30 and up to 45, and over 45.Do the purchases vary by age?Now consider questions 1 to 4:Q = Quantity (in 100s) of aspirin purchased in a
What is the relationship in a regression analysis between Q and P ? Between Q and Y ?Between Q and A ?Now consider questions 1 to 4:Q = Quantity (in 100s) of aspirin purchased in a yearP = Average
Calculate the multiple regression that relates Q with P , Y , and A . Which variables are statistically significant? What is the elasticity of Q with respect to P , to Y , and/or to A ?Now consider
From Table 3.1, columnb, suppose income is $20,000, the excise tax on cigarettes is $1, and the person is a 40-year-old white, non-Hispanic male who completed high school(education level = 9).
Consider demand curves for aspirin, estimated for two different sets of consumers:(a) Q = 20 – 5 P + 0.2 Y(b) Q = 30 – 5 P + 0.2 Y If Y = $20 and P = $1, calculate the price and income
Given the regression estimate of the demand equation ofwhere Y is income, what is the change in demand if price rises by $1, holding income constant? What is the percentage change in demand if price
Consider the estimate demand equation ofwith t values in parentheses, where P z is the price of another good Z , and Y is income.Is good Z a substitute or a complement? Can we say confi dently
Look at Regression (b) in Table 3.1, and consider the following questions:(a) Does BMI increase as income rises?(b) Using the variables Age and Age-squared, calculate the changes in BMI between the
Table 21.2 shows GDP/capita and total health care spending per capita for 42 countries(the fi rst two columns of numbers).(a) Calculate the means of both variables.(b) Calculate a regression relating
In what ways is social cost-benefi t analysis similar to a consumer’s decision about allocating resources or to a fi rm’s investment decision? In what ways is it different?
What external benefi ts or costs would you expect from a project designed to develop sanitary waste product disposal in a third-world village? Why do these need to be considered as part of a CBA of
Are jobs that are created as a result of a social project considered as a benefi t, a cost, or both?
Some suggest that a dollar value cannot be placed on life; that is, life is priceless. Explain how the dilemma to social decision created by this view might be resolved.
Does it matter whether a higher or lower discount rate is applied to the CBA of a social project? If so, why?
Discuss possible reasons why the estimates of the value of life presented in Table 4.1 differ so much. Table 4.1 How Much Is One Life Worth? Meta-analysis of wage-based studies Miller (2009) Mrozek
How does the willingness-to-pay principle of welfare economics differ from the valuation of an extra life-year in applying QALYs?
Figure 4.6 shows equity as point D , or equal outputs. If we defi ned equity in terms of equal inputs, how would our answer change? Why? 30 Ed's QALYS 20 10 Q +0 = 20 Q+0,-10 B 10 2-2-Qur-23 E
Distinguish between cost-benefi t analysis (CBA) and cost-effectiveness analysis (CEA).Can CEA replace CBA in all cases? If not, why not?
The text noted that cost-effectiveness analysis began with the military. Consider the planning of a military intervention against an enemy. How (conceptually) would one measure benefi ts? Is it easy
If a society has a fi xed budget that it can devote to all interventions, formulate a prioritizing rule that would save the greatest number of years of life for a given budget.
Using Figure 4.3, explain why a pollution abatement program that reduces discharge beyond Q1 is ineffi cient. Price P 0 Demand Consumers' Surplus Producers' Surplus Cost to Sellers Figure 4.3
Consider the following two projects. Both have costs of $5,000 in Year 1. Project 1 provides benefi ts of $2,000 in each of the fi rst four years only. The second provides benefi ts of $2,000 for
Consider the following table of costs and benefi ts from a governmental policy to clean the water in a local area.(a) What level of abatement is most effi cient by general economic criteria?(b) Would
Consider a project that costs $10,000 today. It will provide benefi ts of $4,000 at the end of Year 1, $3,500 at the end of Year 2, and $3,500 at the end of Year 3. If the discount rate is 6 percent,
Consider a hypothetical three-stage screening test for a cancer with the following rates of detection and costs:(a) Calculate the average cost per cancer detected in the three stages.(b) Calculate
Using the diagram below, calculate:(a) total consumer expenditures(b) total cost to sellers(c) total consumers’ surplus(d) total producers’ surplus(e) the sum of the consumers’ and the
Using the diagram below, suppose that producers need to have licenses to sell apples, and that only 90 units of apples are licensed (i.e., Q is limited to 90). Calculate:(a) the sum of the consumer
In Figure 4.6 suppose that the production possibility frontier was a straight line with slope –2.0. What would be the cost-effective allocation of resources? Why is this the case? 25 Price 10 2
Assume that health production is subject to diminishing returns and that each unit of health care employed entails a constant rate of iatrogenic (medically caused) disease.Would the production of
Which of the following are important in explaining the modern rise in population in England and Wales: birthrates, death rates, and net migration rates? Describe the evidence.

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