1. (5 points) Medical care spending has increase significantly in the last 60 years. a. List and discuss the four primary reasons why medical care spending has increased in the last 60 years? b. Is it a good thing or a bad thing that medical care spending has increased so much?

2. (3 points) What are the leading causes of death for young people? How much does the medical care system have to do with their prevention?

3. (3 points) What are the leading causes of death for older people? Which has more to do with their rates of occurrencelifestyle choices or medical care received throughout a person's lifetime?

4. (4 points) I want you to draw some indifference curves for two goods, say Apples and Oranges. Label two points A and B where the consumer is indifferent between consuming at either point. Label point C as a point that is strictly preferred by the consumer to A or B.

5. (5 points) Suppose your utility function over goods H (health) and X (other goods) is given by U(H, X) = H * X. Sketch a graph of the indifference curve associated with 10 units of utility.

6. (5 points) Is it rational (from a utility perspective) for some people to smoke cigarettes? If so, illustrate this graphically using an indifference curve with health on one axis and cigarettes on the other axis. Explain your answer.