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?

Short Answer

Expert verified

The well-intended policy induces the individual to consume "excessive" health care services in future years and helps in economic growth and development.

Step by step solution

01

Given Information

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 medical care strategy will work on the soundness of the general public. It will diminish newborn child death rate, maternity death rate, and hunger generally.

02

Explanation

This will further develop the future. It will increment the proficiency rate as it will diminish the school dropout rate because of ailing health generally.

The people in poverty of the nation can't profit from the medical care administrations. Assuming government meddles and gives them general medical care, their efficiency will increment and accordingly can diminish the destitution somewhat. Assuming that individuals utilize inordinate medical care administrations, it will thus work for the financial advancement of the country.

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Most popular questions from this chapter

Describe how to use a Lorenz curve to represent a nation's income distribution

Estimates indicate that in recent years, the poorest 40 percent of the population earned about 15 percent of total income in Argentina. In Brazil, the poorest 40 percent earned about 10 percent of total income. The next-highest 30 percent of income earners in Argentina received roughly 25 percent of total income. In Brazil, the next-highest 30 percent of income earners received approximately 20 percent of total income. Can you determine, without drawing a diagram (though you can if you wish), which country's Lorenz curve was bowed out farther to the right?

Based on your answers to Problems 30-13 and 30-14, when A increased, did the degree of income inequality increase or decrease? Explain why your answer makes sense by referring to the implied change in the shape of the Lorenz curve.

Consider the graph nearby, which depicts Lorenz curves for countries X, Y, and Z.

a. Which country has the least income inequality?

b. Which country has the most income inequality?

c. Countries Y and Z are identical in all but one respect: population distribution. The share of the population made up of children below working age is much higher in country Z. Recently, however, birthrates have declined in country Z and risen in country Y. Assuming that the countries remain identical in all other respects, would you expect that in 20 years the Lorenz curves for the two countries will be closer together or farther apart? (Hint: According to the age-earnings cycle, what typically happens to income as an individual begins working and ages?)

A government agency notifies the physicians' group in Problem 30-10 that to continue providing services in the community, the group must document its activities. The resulting paperwork expenses raise the cost of each unit of health care services that the group provides. What is the likely effect on the profit-maximizing price and the equilibrium quantity of health care services provided by the physicians' group in this community?

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