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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a. What is the value of the Gini coefficient if area B is twice as large as area A?
b. Suppose that the Lorenz curve becomes more bowed, with the result that area B becomes exactly the same size as area A. What will be the new value of the Gini coefficient?
Explain why the productivity standard for the distribution of income entails rewarding people based on their contribution to society's total output. Why does the productivity standard typically fail to yield an equal distribution of income?
Now suppose that in the situation described in Problem 30-13, the distribution of income changes in such a way that A increases to one-third of the area denoted B. What is the new value of the Gini coefficient?
How might a state such as Arkansas adjust its administration of income maintenance programs to reduce or eliminate the marriage penalty? (Hint: What if the state were to base programs' benefits on total dollars of income received by both adults combined whether or not they were married?)
A government agency determines that the entire community discussed in Problem 30-10 qualifies for a special program in which the government will pay for a number of health care services that most residents previously had not consumed. Many residents immediately make appointments with the community physicians' group. Given the information in Problem 30-10, 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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