Question 5,6 a and b 5. As a result of the Affordable Care Act, many states have

Question

Question 5,6 a and b

5. As a result of the Affordable Care Act, many states have loosened their restrictions on nurse practitioners. Using supply and demand curves, explain the impact of these loosened restrictions on a) Neurosurgeons b)general practitioners c) demand for antibiotics The healthier an individual is the fewer days they are sick. The table below provides the relationship between the individual's health stock and sick days: (25 points) 6. Health StockSick Days Health Stock 3 4 5 Sick Days 100 70 50 35 26 19 13 10 6 4 12 13 7 8 The individua works and has a daily wage rate-$200. Moreover, the total cost (incl direct and opportunity costs) for the individual to increase his health stock by 1 unit is $4,000. If the real interest rate is 7% and the person's health stock depreciates at a rate of 8% per a) What is the optimal stock of health for the person to have from a pure investment standpo year: b) Show graphcally how the optimal stock of health was found

Explanation / Answer

ANSWER:

a) The neurosurgeons will reduce as more individuals will opt for nursing which is less restricted. The supply will decrease shifting the supply curve left.The Equilibrium price will increase but equilibrium quantity will decrease.

b) The general practitioners will increase due to loosened restrictions. The supply curve will shift to the right leading to decreased equilibrium price price but increased quantity.

c) Demand will increase due to increase medical practitioners. Demand curve will shift to the right increasing both equilibrium quantity and and price.

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