Supply and Demand, Health Care Consumption


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Supply and Demand, Health Care Consumption 1 answer below » See attached file. Document Preview: Healthcare Economics

In an effort to reduce education expenditures, Ohio shuts down two of the five colleges that train nurses.

Using the traditional supply and demand model, discuss the effects of the budget cut on three markets: the markets for nurse schooling (tuition and number of students), nurses (wages and employment), and the health services (prices and quantity). Use graphs if appropriate.

Suppose that in addition to the above scenario, View complete question » See attached file. Document Preview: Healthcare Economics

In an effort to reduce education expenditures, Ohio shuts down two of the five colleges that train nurses.

Using the traditional supply and demand model, discuss the effects of the budget cut on three markets: the markets for nurse schooling (tuition and number of students), nurses (wages and employment), and the health services (prices and quantity). Use graphs if appropriate.

Suppose that in addition to the above scenario, average household incomes increased due to a rebound in the automotive industry. Describe how equilibrium prices and quantities in the health services market would compare to the situation prior to the combined budget cuts and increases in the automotive industry.

Billy Sue “produces” health through the consumption of medical care, education, and food. She has twelve years of schooling and her level of food consumption is not expected to change this year. The relationship between medical care and health status is provided in the following table:

_x000C_ where:
M = medical care visits
H = index of health
MP = marginal product of medical care visits
AP = average product of medical care visits

Complete the table.
What is the marginal product if Billy Sue increases her use of medical care from 4 to 5?
Graph the relationship between medical care and health.
Graph the relationship between medical care and both marginal product of medical care and average product of medical care.
Explain the meaning concept “marginal product of health care.” Why does the marginal product diminish?

Ohio is one of many states that passed Certificate of Need (CON) laws in the 1970s. Many interest groups are in favor of repealing all CON regulations. Assuming perfect markets, describe in one page or less, using graphs where appropriate, the effect of a repeal of Ohio’s CON law on:

a. hospital inpatient market in Ohio

b. long-term care market in Ohio.

Feel free to consult the… Attachments: Day-3-4—Pro….doc View less » Sep 10 2015 06:33 AM

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