Suppose a health expenditure function is specified in the following manner:

E = 500 + 0.2Y,

where E represents annual health care expenditures per capita, and Y stands for income per capita.

A. Using the slope of the health expenditure function, predict the change in per capita health care expenditures that would result from a $1,000 increase in per capita income.

Expenditures change = _______________

B. Compute the level of per capita health care spending when per capita income takes on the following dollar values: 0; 1,000; 2,000; 4,000; and 6,000.

Per Capita Income Spending

$0 _______________

$1,000 _______________

$2,000 _______________

$4,000 _______________

$6,000 _______________