Fun with cost-sharing. An important distinction in health insurance is between the list price (PL) and out-of-pocket price (PP) of a medical good or service. The list price is the official price that the provider charges the insurance company, while the out-of-pocket price is the price that the insurance customer faces. Sometimes, the out-of-pocket price depends on the list price.

(a)Draw a set of axes with list price PL on the y-axis and quantity Q on the x-axis (you will want to make your graph nice and big, because we will be adding several demand curves).

Suppose a consumer's demand for a particular medical procedure is as follows: Q = 100 - PP. Draw her demand curve in PL - Q space under the assumption of no insurance and label it D1. You will have to think about the relationship between PL and PP to draw it correctly.

Now assume the same consumer is fully insured. Think about how this affects the relationship between PL and PP and draw a full-insurance demand curve in PL - Q space. Label this curve D2.

Now assume the consumer is part of a partial insurance plan with a coinsurance provision. Her insurance pays 50% of all medical expenses. Consider again the relationship between PL and PP and plot a coinsurance plan demand curve in PL - Q space. Label this curve D3.

Finally, assume the consumer is part of a partial insurance plan with a co-payment provision. Her insurance pays all expenses above and beyond her co-payment of $25 for each unit of Q. Consider again the relationship between PL and PP and plot a co-payment-plan demand curve in PL - Q space. Label this curve D4.

Home Homework: HW4: Chapter 3 Score: 0 of 1 pt 11 of 25 (15 complete) HW Score: 29.33%, 7 Until y 3.3.15 Questic Graph the given function. Give the intercepts and state the range y = [(x)= - 2x - 6x Use the graphing tool to graph the function. Worke ent Soo Click to enlarge ipts graph estion lestion estion estion estion estion estion Click the graph, choose a tool in the palette and follow the instructions to create your graph 2 parts remaining Clear All Check Answer3. Suppose the demand and supply equations are as follows: QD = 350 - 1/2 Px Qs, = 3Px a. Compute the equilibrium price and quantity and draw the demand and supply curves. b. Compute consumer surplus (CS) and producer surplus (PS) at equilibrium. c. Explain what the values of CS and PS represent.68. The fundamental unit of matter is the sugar molecule. A. True B.False 69. Ecosystem boundaries are usually defined by easily identifiable demarcations. A. True B.False 70. Environmental science is an interdisciplinary area of study that deals with all of the follo except A. politics. B. economics. C. ethics. D. All of these are correct. 71. Damming water changes its quantity and not its quality. A. True B.False 72. Evaluate the ratio [H+] at pH 3 / [H+] at pH 7. A. 0.0001 B. 0.001 C. 0.429 D. 10.000IL Short Answer Questions: 1. What is scarcity and why does it exist? How is scarcity related to the study of economics? 10 points 2. Discuss the three fundamental economic questions that all nations must address. 10 points 3. Draw a supply and demand curve for cars and graphically illustrate the effect of an increase in the price of steel (an input). Label all axes and curves. 10 points 4. Draw a PPF with cars on the x-axis and TV's on the Y axis. Make sure the PPF exhibits increasing opportunity costs. 10 points