1. Suppose the basket of a typical consumer includes 5 doctor's visits a year and one outpatient visit. Between 2018 and 2019 the price of a doctor's visit increased from $40 to $42 and the price of an outpatient visit increased from $100 to $110. What is the medical CPI between the two years?
2. The following graph depicts the relationship between the level of insurance and the rate of illness. Why does it not take into account moral hazard?

Rate of illness p utility increasing 12 full Level of insurance coverage