QUESTION 4: Read the following article from Barron's. Graphically analyze and explain your interpretation of the article. In other words, think like an economist in the explanation of your results. Sound economic theory. (20 points)

Barron's - A Supply-Side Solution for Health Care by H. Woody Brock

"America's biggest economic problem today is health care. Health care is consuming more than 18% of GDP and, if unchecked, that number could grow to 35% by midcentury. It could bankrupt the government and lead to economic collapse.

The Supreme Court has upheld most of the Patient Protection and Affordable Care Act -- otherwise known as Obamacare -- but the new law isn't the right solution. In spite of its laudable objectives, the administration's health-care initiative most likely will make the problem even worse.

Obamacare addresses only two of the three key elements of the health-care problem: It attempts to expand access to medical treatment by increasing coverage under private insurance and Medicaid; it attempts to control the costs of medical treatment, which have been growing at very high rates.

Each political party has a philosophical leaning toward one type of solution to the health-care-finance problem. We need to apply both of their solutions and also use a third method -- all at the same time.

While these two goals sound reasonable, they are in fact contradictory. Increasing insurance coverage will create a huge surge in demand for medical services as some 40 million previously uninsured Americans seek treatment, and several million people with pre-existing conditions become eligible for insurance. At the same time, implementation of the required cost-cutting measures by Obamacare will end up restricting the supply of a large number of treatments.

The combination of increased demand and restricted supply can only result in a new wave of rising prices or a rationing of available care -- or both. It's a fundamental law of economics."