Test: Second Midterm Exam (Copy) Submit Test This Question:1 pt 12 of 50 This Te

Question

Test: Second Midterm Exam (Copy) Submit Test This Question:1 pt 12 of 50 This Test: 50 pts possible Question Help Premium (thousands of dollars per year) The graph shows the marginal benefit from health insurance and the willingness and ability to pay for it 12 The marginal cost of health insurance is a constant $8,000 per family per year. Marginal social benefit from insurance exceeds the willingness and ability to pay by a constant $2,000 per family per year. Suppose the government decides to subsidize health insurance (like Obamacare The total subsidy that achieves the efficient coverage is $billion D = MB 10 20 40 60 30 Quantity (millions of families insured) 50

Explanation / Answer

=0.02 billion. The reason is quite simple. Each family needs 200 subsidy at 8 thousands of dollars 10 million demand the policy. So the answer is 2 multiplied by 10000000=20000000.now 1 billion =100 crore so 1 crore is 1/100 billion. 2 crore =2/100 billion= 0.02 billion

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