12) This question concerns policy instruments aimed at reducing moral hazard from health insurance provision. a. Use the graph below to explain why providing health insurance can create moral hazard. b. How is the elasticity of demand for health care related to the extent of moral hazard? Explain your answer mathematically or by drawing two graphs (one with inelastic and one with very elastic health care demand) c. One way of reducing the moral hazard is by using a system of deductibles, coinsurance and/or co-payments. What is the difference between these three? How do they reduce moral hazard? d. Explain how the graph below implicitly embeds the assumption that individuals understand the marginal health benefit for each dollar of healthcare expenditure. e. Summarize the research design and main findings of Brot-Goldberg et al (2017QJE ). How do these results cast doubt on the assumption you explained in part d ? f. Describe the implications of these findings for policies aimed at reducing moral hazard. What policies are more likely to reduce moral hazard efficiently? The Deadweight Loss of Excessive Health Care Consumption (Feldstein 1973) 12) This question concerns policy instruments aimed at reducing moral hazard from health insurance provision. a. Use the graph below to explain why providing health insurance can create moral hazard. b. How is the elasticity of demand for health care related to the extent of moral hazard? Explain your answer mathematically or by drawing two graphs (one with inelastic and one with very elastic health care demand) c. One way of reducing the moral hazard is by using a system of deductibles, coinsurance and/or co-payments. What is the difference between these three? How do they reduce moral hazard? d. Explain how the graph below implicitly embeds the assumption that individuals understand the marginal health benefit for each dollar of healthcare expenditure. e. Summarize the research design and main findings of Brot-Goldberg et al (2017QJE ). How do these results cast doubt on the assumption you explained in part d ? f. Describe the implications of these findings for policies aimed at reducing moral hazard. What policies are more likely to reduce moral hazard efficiently? The Deadweight Loss of Excessive Health Care Consumption (Feldstein 1973)