Problem 1: Consider the market for radiologists in the U.S. Assume that the MPN of radiolo-...

 

Transcribed Image Text:

Problem 1: Consider the market for radiologists in the U.S. Assume that the MPN of radiolo- gists -measured in terms on number of MRIs read per radiologist- is decreasing in the number of radiologists, and that the supply for radiologists is perfectly inelastic. a) Illustrate the equilibrium in the market for radiologists and illustrate the total output gen- erated by the U.S. radiologists. (Hint: Either draw two diagrams or think about the Funda- mental Identity of National Income Accounting.) Suppose now that in addition to the U.S. radiologists, U.S. hospitals can hire foreign radiol- ogists based abroad to read U.S. patients' MRIs. Because of innovations in communication technologies (allowing remote work), hiring foreign radiologists does not entail any additional costs. In addition, the foreign radiologists do not need to move to the U.S. in order to work for U.S. hospitals. Treat the employment of foreign radiologists as an outward shift in the supply of radiologists in the U.S. b) On a new graph discuss the effects on the real wage of U.S.-based radiologists, Gross Domestic Product (GDP) in the U.S. and abroad, and Gross National Income (GNI) in the U.S. and abroad that follows from offshoring some radiology services. Problem 1: Consider the market for radiologists in the U.S. Assume that the MPN of radiolo- gists -measured in terms on number of MRIs read per radiologist- is decreasing in the number of radiologists, and that the supply for radiologists is perfectly inelastic. a) Illustrate the equilibrium in the market for radiologists and illustrate the total output gen- erated by the U.S. radiologists. (Hint: Either draw two diagrams or think about the Funda- mental Identity of National Income Accounting.) Suppose now that in addition to the U.S. radiologists, U.S. hospitals can hire foreign radiol- ogists based abroad to read U.S. patients' MRIs. Because of innovations in communication technologies (allowing remote work), hiring foreign radiologists does not entail any additional costs. In addition, the foreign radiologists do not need to move to the U.S. in order to work for U.S. hospitals. Treat the employment of foreign radiologists as an outward shift in the supply of radiologists in the U.S. b) On a new graph discuss the effects on the real wage of U.S.-based radiologists, Gross Domestic Product (GDP) in the U.S. and abroad, and Gross National Income (GNI) in the U.S. and abroad that follows from offshoring some radiology services.

Answer rating: 100% (QA)

a In the market for radiologists in the US the equilibrium can be illustrated by the intersection of the demand and supply curves The demand curve rep... View the full answer