From an economic perspective, what tendencies do you see in the evolution of the health insurance market in this country?
A consumer has a demand function for good 1: x_1 (p_1,p_2,m)=19+m/(4p_1 )+6p_2 Where p_1 and p_2 are respective prices of good1 and good2 and m is the income. I am halfway through my questions. g) Assume well-behaved preferences and draw a diagram, with x_1 on the horizontal axis and x_2 on the vertical axis, showing th
A large manufacturing company has for years offered generous health insurance to its employees. Over time, the cost of the health plan has increased considerably with the average cost being roughly $6000 per year. The firm has hired a management consulting company to make recommendations about how to reduce costs. The consulting
Consumer-Driven Health Plans: How do consumer-driven health plans work for different sections of the population? Which socioeconomic group is likely to benefit the most? Consider the following sections of the population: Low-income versus high-income; Well versus unwell (people with chronic conditions and high costs of care) ; E
A company is considering offering a new product. The sales of the new product are forecasted to be $700,000 in year 1 of the planning period, double in year 2, and increase by $50,000 each year thereafter. COGS for the new product are estimated at 50% of the revenue in year 1 and this percentage is reduced by 5% each year after
Consumer-driven health plans (CDHPs) strive to control costs and improve quality of care by requiring consumers to take control of their own healthcare decisions. Consumers decide how they want to spend their healthcare dollars, depending on what is important to them. CDHPs are geared to encourage participants to enroll in some
Table 1 presents a breakdown of the sources of national health expenditures for selected years from 1970 through 2009. Comment on the changes in the categories of expenditure sources (i.e., out-of-pocket, third-party payers, and types of third-party payers), both year-to-year changes and over the entire period. Table 2 presen
In some state Medicaid programs, the coinsurance rate for prescription drugs is 0 (recipients have no out-of-pocket expenses for prescription drugs). Assume the inverse demand for the number of prescriptions filled per month without insurance is P=45-5Q. Graph the demand curve with and without insurance. Over the past 15 y
Suppose you have a two-period model OLG in discrete time. Lt agents are born in time t, where Lt = (1+n)tL0. Normalize L0 = 1 and let n > 0. Preferences of a young agent born in time t are time separable: u(c1t,c2t+1) = 2(c1t)0.5 + 2(c2t+1)0.5, where c1t denotes consumption in period t; c2t+1 denotes consumption in period t+1
Rocky Mountain Manufacturing produces a single product. The original budget for November was based on expected production of 16,700 units; actual production for November was 14,362 units. The original budget and actual costs incurred for the manufacturing department follow: Original Budget A
Kaidu consumes two goods, x_1 and x_2, with respective prices p_1 and p_2. His utility function is given by U_Kaidu (x_1,x_2 )=x_1^(1/4) x_2^(3/4) . Let p_1=5 and p_2=4. Kaidu's income is 80. - Suppose the government imposes a $1 tax each unit consumption of x_2, solve for the new optimal consumption bundle. How do i obtai
Consider the following information on Alfred's demand for visits per year to his health clinic, if his health insurance does not cover clinic visits (100% coinsurance rate). P Q 5 9 10 9 15 9 20 8 25 7 30 6 35 5 40 4 (a) Alfred has been paying $30 per visit. How many visits does he make
Assess the impacts that the Internet and e-commerce have had on international business and how it is conducted. What are the main opportunities and challenges these technologies have presented to MNEs?
Should I buy or rent a house?
Good-N-Safe Insurance Agency's finance department has been swamped with claims stemming from a recent hurricane. Because they're overwhelmed with work they can justify allowing one of their inspectors, who also happens to be accounting savvy, to process the necessary purchase order, approve the purchase order, make the final approval for payment, and prepare the check to pay for a new Dell laptop that he will be using in the field without violating any of the principles of internal control.
Good-N-Safe Insurance Agency's finance department has been swamped with claims stemming from a recent hurricane. Because they're overwhelmed with work they can justify allowing one of their inspectors, who also happens to be accounting savvy, to process the necessary purchase order, approve the purchase order, make the final ap
The MacBurger Company a chain of fast food restaurants, expects to earn $200 million after taxes for the current year. The company has a policy of paying out half of its net after-tax income to the holders of the company's 100 million shares of common stock. A share of the common stock of the company currently sells for eight times current earnings. Management and outside analysis expect the growth rate of earnings and dividends for the company to be 7.5 percent per year. Calculate the cost of the equity capital to this firm.
The MacBurger Company a chain of fast food restaurants, expects to earn $200 million after taxes for the current year. The company has a policy of paying out half of its net after-tax income to the holders of the company's 100 million shares of common stock. A share of the common stock of the company currently sells for eight
University Athletic Wear (UAW) is evaluating several new product proposals. Resources are available for any or all of the products . UAW uses a MARR of 15% and a time span of 5 years for project evaluations. Determine which new product(s) should be chosen using Internal rate of return criteria. MARR=15%
AAAcme Company is preparing an investment plan and has received three proposals with investments and returns as shown below. Which one(s) should be approved using a discounted payback period of 3 years (meaning by the end of year 3). AAAcme uses a MARR of 12%. Cash Flow Year X
What is third-degree price discrimination? What three conditions must be met for third-degree price discrimination to be feasible? Give examples of firms that use third-degree price discrimination.
Chapter 11 1. Why does the assumption of independence of risks matter in the example of insurance? What would happen to premiums if the probabilities of house burning were positively correlated? 14. Small firms can discover the abilities of their workers more quickly than large ones because they can observe the workers more
Do you think that Hyatt practiced SHRM in deciding to outsource housekeeping? Can you determine if it improved or hurt the bottom line? What would you have advised Hyatt management to do to remain competitive now and in the future? Text Hyatt Report When the housekeepers at the three Hyatt hotels in the Boston area we
The Central Publishing Company is about to publish its first textbook in managerial economics. It is now in the process of estimating costs. It expects to produce 10,000 copies during its first year. The following costs have been estimated to correspond to the expected copies. a.Paper Stock $8,000 b.Typesetting $15,000 c.Pr
a. Discuss the problems of measuring productivity in actual work situations. b. How might productivity be measured for each of the following industries? i. Education (e.g., elementary and secondary education, higher education - undergraduate and graduate) ii. Government (e.g., the Social Security Office, the Internal Revenue
As more potentially life-saving, but expensive drugs come to market, patients and insurance companies have difficult decisions to make. While in theory people would pay anything to save their own life or that of a family member, the efficacy of some of these drugs is uncertain and some are not curative. For example, Genentech's
Suppose the corporate income tax were eliminated and corporate income allocated to shareholders on a pro rata basis according to their proportion of outstanding stock. How would such a change in tax policy affect the excess burden and incidence of the tax, assuming that all forms of investment income are included in a comprehensive income tax base?
Suppose the corporate income tax were eliminated and corporate income allocated to shareholders on a pro rata basis according to their proportion of outstanding stock. How would such a change in tax policy affect the excess burden and incidence of the tax, assuming that all forms of investment income are included in a comprehens
a. Discuss your view of elasticity of gasoline based upon the changes we have experienced during the past few years. b. Why is the long run elasticity greater than the short run elasticity for gasoline? c. Under what economic situations will public transportation present potential competition to private automobiles?
Consider a society with two people. Rosa earns an income of $120,000 per year and Jake earns an income of $45,000 per year. The government is considering a redistribution plan that would impose a 23% tax on Rosa's income and give the revenue to Jake. This policy distorts Rosa's and Jake's incentives, such that instead Rosa retaining $92,400 and Jake ending up with $72,600, Rosa would have an income of $77,000, and Jake would have an income of $65,000 if this redistributive plan were implemented. Specifically, since Rosa will not receive the income she earns, she decides to work less and earn an income of only $100,000, of which $23,000 (23% of $100,000) will be owed in taxes. So Rosa will take home an income of $77,000. The $23,000 that Rosa pays in taxes will be transferred by the government to Jake. Since Jake now receives payment from the government, he will not work as many hours and will earn an income of $42,000 instead of his initial $45,000. So Jake total income, which includes his income from work and the government payment will be $42,000 + $23,000=$65,000. Without a redistribution plan, total income in this society is ___________. After the redistribution plan is implemented, total income in this society is___________. Therefore, the redistribution plan ______________total income in this society.
Consider a society with two people. Rosa earns an income of $120,000 per year and Jake earns an income of $45,000 per year. The government is considering a redistribution plan that would impose a 23% tax on Rosa's income and give the revenue to Jake. This policy distorts Rosa's and Jake's incentives, such that instead Rosa re
1. (Part A - You are considering an upgrade at a chip manufacturing plant. A new VLSI testing station costs $100,000, installed. It will save $50,000 per year in labor costs. Use five-year tax life and a tax rate of 40%. Find the rate of return (IRR). (Use two sig. figs.)) Part B- If the unit requires reprogramming calibratio
How would you fix the Social Security system in the United States?
1. - Colgate Distributing Company has the option to provide to its sales representatives a car or reimburse them the mileage for the use of its own cars. If the company provides the car, it will pay all the expenses related to it, including gas for business travels. The estimations are as follow: Car cost $15,000 Estimated Li