16.6 For each scenario, assess whether an externality is present. a. Vaccinating

Question

16.6 For each scenario, assess whether an externality is present.

a. Vaccinating children against influenza reduces its incidence among elderly.

b. Newly graduated nurses flock to reaching hospitals for training. After working for a year, many leave work for competitors.

c. A couple who planned to move to Florida to retire find that the plummeting house market has wiped out equity.

d. Physicians complain that they spend a third of their time explaining to patients why television advertisement about medications for their conditions do not apply to them.

16.12 Provide health examples of the following types of market failure:

a. External benefits:

b. External costs:

c. Public goods:

d. Imperfect competition:

e. Imperfection information:

16.13 Private foundations support medical research. Doesn’t their support prove that tax funding of medical research is unnecessary? Please explain? Every 1 percent reduction in the level of particulates in the air costs $200,000. Low-income residents in a region have a demand for particular reduction of R=10-p (R is the level of particulate reduction and P is the price per 1 percent reduction). High-income residents have a demand for particulate reduction of R=40-2P.

a. Is reduction of the level of particular a public or private good?

b. What will the market demand for particulate reduction be?

c. What is the optimal level of particulate reduction? 16 Few orthopedic surgeons publish data describing their surgical volumes, infection rates, mortality rates, functional gain rates, or customer satisfaction rates. a. How much would a regulation requiring publication of such data cost? b. Would such a regulation improve the workings of the market?

d. Would such regulation be an appropriate government activity?

e. Do we need a regulation requiring publication of data for surgeons if private physician rating firms already exists?

Please if answer questions, put the number for answered question. Thank you!

Explanation / Answer

A) Positive externality is found, If children are vaccinated adults also share the benefit

B) Negative externality is present, After training they leave this makes hospitals like training institutes not real hospitals

C) No externality is found

D) No externaltiy exist

D)

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