• Use sound economic reasoning to assess whether (and why) each of the following people may prefer to purchase insurance individually or as part of a group.
  • 65-year-old male, lifelong smoker, with congestive heart failure
  • 25-year-old male, normal weight, no known health problems
  • 35-year-old female, married, no known health problems
• Do you anticipate adverse selection to be a factor with person a, b, or c? Explain, and be specific in your assumptions

Chapter 9:

• Suppose you are a researcher investigating a new treatment for cancer that promises to extend life and improve quality of life. Its side effects include extreme fatigue, weakness, and nausea. Discuss why using QALY gained is preferred to life-years gained as a measure of treatment effectiveness.
• • Explain the nuances that should be considered when calculating the cost of an intervention.