The setting of each of these questions is the nation of Freedonia, which includes Asclepius Hospital (one of many local hospitals), and the BBNW Insurance Companywhich sends most of its patients to Asclepius for care.

1. Freedonia has passed a law that permits, but does not require, insurers to include maternity benefits in their insurance packages. What are the likely effects of this law on the insurance market? What are the implications for Asclepius?

2. Health insurance is becoming very expensive in Freedonia, and BBNW wants to raise coinsurance and deductibles to combat this. How are these changes likely to affect Asclepius? What evidence can you present that supports your argument?