"Consider how health insurance affects the quantity of healthcare services performed. Suppose that the typical medical procedure has a cost of $100, yet a person with health insurance pays only$20 out of pocket. Her insurance company pays the remaining $80. (The insurance company recoups the$80 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undertake.)

Draw the demand curve in the market for medical care. (In your diagram, the horizontal axis should represent the number of medical procedures.) Show the quantity of procedures demanded if each procedure has a price of $100."

Consider how health insurance affects the quantity of healthcare services performed. Suppose that the typical medical procedure has a cost of $100, yet a person with health insurance pays only$20 out of pocket. Her insurance company pays the remaining $80. (The insurance company recoups the$80 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undertake.) a. Draw the demand curve in the market for medical care. (In your diagram, the horizontal axis should represent the number of medical procedures.) Show the quantity of procedures demanded if each procedure has a price of $100. b. On your diagram, show the quantity of procedures demanded if consumers pay only$20 per procedure. If the cost of each procedure to society is truly $100, and if individuals have health insurance as just described, will the number of procedures performed maximize total surplus? Explain. c. Economists often blame the health insurance system for excessive use of medical care. Given your analysis, why might the use of care be viewed as “excessive”? d. What sort of policies might prevent this excessive use?

Consider how health insurance affects the quantity of healthcare services performed. Suppose that the typical medical procedure has a cost of $\$ 100$, yet a person with health insurance pays only $\$ 20$ out of pocket. Her insurance company pays the remaining $\$ 80$. (The insurance company recoups the $\$ 80$ through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undertake.)

Draw the demand curve in the market for medical care. (In your diagram, the horizontal axis should represent the number of medical procedures.) Show the quantity of procedures demanded if each procedure has a price of $\$ 100$.

Consider how health insurance affects the quantity of healthcare services performed. Suppose that the typical medical procedure has a cost of 100 dollar, yet a person with health insurance pays only 20 dollar out of pocket. Her insurance company pays the remaining 80 dollar. (The insurance company recoups the 80 dollar through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undertake.)$\newline$ a. Draw the demand curve in the market for medical care. (In your diagram, the horizontal axis should represent the number of medical procedures.) Show the quantity of procedures demanded if each procedure has a price of 100 dollar.$\newline$ b. On your diagram, show the quantity of procedures demanded if consumers pay only 20 dollar per procedure. If the cost of each procedure to society is truly 100 dollar, and if individuals have health insurance as described above, will the number of procedures performed maximize total surplus? Explain.$\newline$ c. Economists often blame the health insurance system for excessive use of medical care. Given your analysis, why might the use of care be viewed as "excessive"?$\newline$ d. What sort of policies might prevent this excessive use?

Consider how health insurance affects the quantity of healthcare services performed. Suppose that the typical medical procedure has a cost of $\$ 100$, yet a person with health insurance pays only $\$ 20$ out of pocket. Her insurance company pays the remaining $\$ 80$. (The insurance company recoups the $\$ 80$ through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undertake.)

a. Draw the demand curve in the market for medical care. (In your diagram, the horizontal axis should represent the number of medical procedures.) Show the quantity of procedures demanded if each procedure has a price of $\$ 100$.

b. On your diagram, show the quantity of procedures demanded if consumers pay only $\$ 20$ per procedure. If the cost of each procedure to society is truly $\$ 100$, and if individuals have health insurance as just described, will the number of procedures performed maximize total surplus? Explain.

c. Economists often blame the health insurance system for excessive use of medical care. Given your analysis, why might the use of care be viewed as "excessive"?

d. What sort of policies might prevent this excessive use?

Consider how health insurance affects the quantity of healthcare services performed. Suppose that the typical medical procedure has a cost of $\$ 100$, yet a person with health insurance pays only $\$ 20$ out of pocket. Her insurance company pays the remaining $\$ 80$. (The insurance company recoups the $\$ 80$ through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undertake.)

On your diagram, show the quantity of procedures demanded if consumers pay only $\$ 20$ per procedure. If the cost of each procedure to society is truly $\$ 100$, and if individuals have health insurance as described above, will the number of procedures performed maximize total surplus? Explain.

A case study in this chapter discusses the federal minimum-wage law. Now suppose the Secretary of Labor proposes an increase in the minimum wage. What effect would this increase have on employment? Does the change in employment depend on the elasticity of demand, the elasticity of supply, both elasticities, or neither?

A case study in this chapter discusses the federal minimum-wage law. What effect would this increase in the minimum wage have on unemployment? Does the change in unemployment depend on the elasticity of demand, the elasticity of supply, both elasticities, or neither?

" A case study in this chapter discusses the federal minimum-wage law.

What effect would this increase in the minimum wage have on unemployment? Does the change in unemployment depend on the elasticity of demand, the elasticity of supply, both elasticities, or neither?"

A case study in this chapter discusses the federal minimum-wage law.

a. Suppose the minimum wage is above the equilibrium wage in the market for unskilled labor. Using a supply-and-demand diagram of the market for unskilled labor, show the market wage, the number of workers who are employed, and the number of workers who are unemployed. Also show the total wage payments to unskilled workers.

b. Now suppose the secretary of labor proposes an increase in the minimum wage. What effect would this increase have on employment? Does the change in employment depend on the elasticity of demand, the elasticity of supply, both elasticities, or neither?

c. What effect would this increase in the minimum wage have on unemployment? Does the change in unemployment depend on the elasticity of demand, the elasticity of supply, both elasticities, or neither?

d. If the demand for unskilled labor were inelastic, would the proposed increase in the minimum wage raise or lower total wage payments to unskilled workers? Would your answer change if the demand for unskilled labor were elastic?

"A case study in this chapter discusses the federal minimum-wage law.

Now suppose the secretary of labor proposes an increase in the minimum wage. What effect would this increase have on employment? Does the change in employment depend on the elasticity of demand, the elasticity of supply, both elasticities, or neither ?"

"A case study in this chapter discusses the federal minimum-wage law.

If the demand for unskilled labor were inelastic, would the proposed increase in the minimum wage raise or lower total wage payments to unskilled workers? Would your answer change if the demand for unskilled labor were elastic ?"

Consider a market in which Bert from problem 4 is the buyer and Ernie from problem 5 is the seller. a. Use Ernie's supply schedule and Bert’s demand schedule to find the quantity supplied and quantity demanded at prices of $2,$4, and $6. Which of these prices brings supply and demand into equilibrium? b. What are consumer surplus, producer surplus, and total surplus in this equilibrium? c. If Ernie produced and Bert consumed one fewer bottle of water, what would happen to total surplus? d. If Ernie produced and Bert consumed one additional bottle of water, what would happen to total surplus?

The $19$th-century economist Henry George argued that the government should levy a sizable tax on land, the supply of which he took to be completely inelastic.

a. George believed that economic growth increased the demand for land and made rich landowners richer at the expense of the tenants who made up the demand side of the market. Show this argument on an appropriately labeled diagram.

b. Who bears the burden of a tax on land-the owners of land or the tenants on the land? Explain.