Chapter 30: Q.2 - For Critical Thinking (page 686)
Why do you suppose that observers have proposed redesigning income maintenance programs to provide a "marriage premium" via extra benefits if adults with children marry?
The income maintenance programs to provide a "marriage premium" is for the benefit of the people
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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?)
In which the poverty rate has risen in some years and fallen in others but since 1985 has tended to lie in a range between 10 percent and just over 15 percent. If the government's official poverty rate has been based on an absolute measure of poverty instead of a relative measure, would the data plot have tended generally to have sloped upward over time or to have sloped downward? Explain.
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?
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?
Why do you suppose that choosing other increments besides \(15,000 or \)30,000 can yield even more distributional variations of households within these seven income groupings?
(Hint: what do you think could happen if one were to broaden the income increments to \(100,000 or narrow them to \)5,000 while holding the number of income groups equal to seven?)
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