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Chapter 30: Q.1 - Critical Thinking Questions (page 686)
Who do you think provides funds to cover emergency room expenses for an uninsured patient who pays an annual $250 health-law penalty but fails to pay the emergency room charges?
The government provides funds to cover emergency room expenses
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Suppose that a government agency guarantees to pay all of an individual's future health care expenses after the end of this year so that the effective price of health care for the individual will be zero from that date onward. In what ways might this well-intended policy induce the individual to consume "excessive" health care services in future years?
Suppose that a nation has implemented a system for applying a tax rate of 2 per cent to the incomes earned by the 10 per cent of its residents with the highest incomes. All funds collected are then transferred directly to the 10 per cent of the nation's residents with the lowest incomes. What is the general effect on the shape of a Lorenz curve based on incomes after collection and redistribution of the tax?
Consider the following estimates from the early 2010s of shares of income for each group. Use graph paper or a hand-drawn diagram to draw rough Lorenz curves for each country. Which has the most nearly equal distribution, based on your diagram?
Take a look at both Figure 30-8 and Figure 30-9. When health care programs such as Medicare, Medicaid, and the Affordable Care Act's health exchange system were created, Congress based projected costs on quantities of health care consumed at the time the programs were implemented. Was this a reasonable assumption given that the programs all cut out-of-pocket payments for beneficiaries? Explain.
Suppose that a group of physicians establishes a joint practice in a remote area. This group provides the only health care available to people in the local community, and its objective is to maximize total economic profits for the group's members. Explain how the price and quantity of health care will be determined in this community. (Hint: How does a single producer of any service determine its output and price?)
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