Theory and Evidence. Childcare is a sector that is heavily regulated because of the importance of ensuring child safety. The current price of childcare is $1200 a month. The government is concerned with this market: Evidence shows that young parents are not returning to work because they cannot afford childcare. The government conducts a randomized control trial of a new policy. In some randomly selected cities, the government mandates that childcare providers cannot charge more than $800 per month. Other randomly selected cities are left unaffected to serve as a control. In six months, the outcomes show that the number of children getting childcare has not changed, but that waiting lists for childcare have increased dramatically. (a) Can this outcome be reconciled with the theory of supply and demand? (b) Do you expect that outcomes will improve in the long run?

Theory and Evidence. Childcare is a sector that is heavily regulated because of the importance of ensuring child safety. The current price of childcare is $1200 a month. The government is concerned with this market: Evidence shows that young parents are not returning to work because they cannot afford childcare. The government conducts a randomized control trial of a new policy. In some randomly selected cities, the government mandates that childcare providers cannot charge more than $800 per month. Other randomly selected cities are left unaffected to serve as a control. In six months, the outcomes show that the number of children getting childcare has not changed, but that waiting lists for childcare have increased dramatically. (a) Can this outcome be reconciled with the theory of supply and demand? (b) Do you expect that outcomes will improve in the long run?

EBK HEALTH ECONOMICS AND POLICY

7th Edition

ISBN:9781337668279

Author:Henderson

Publisher:Henderson

Chapter12: Medicare

Section: Chapter Questions

Problem 1QAP

See similar textbooks

Similar questions

Lactose intolerance causes difficulty digesting dairy products that contain lactose (milk sugar). It is particularly common among people of African and Asian ancestry. In the United States, 82 % of the population is white, 14 % is black, and 4 % is Asian. Moreover, 15 % of whites, 70 % of blacks, and 90 % of Asians are lactose intolerant.. What percent of the entire population is lactose intolerant?
In 2010 the government’s main medical adviser drew up plans for a minimum price foralcohol intended to double the cost of some drinks.Under the proposal no drinks could be sold for less than 50 pence per unit of alcohol theycontain. This would mean most bottles of wine could not be sold for under £4.50. Theproposal is aimed at reducing alcohol abuse. A spokesman for an opposition party saidthat it was more important to deal with peoples’ attitudes and not just the price of alcohol.The Portman Group, set up by drinks manufacturers to promote sensible drinking, arguesthat it would damage the majority of drinkers who behave responsibly in terms of theirconsumption.The NHS bill for alcohol abuse is an estimated £2.7bn a year. Recent figures showhospital admissions linked to alcohol use have more than doubled in England since 1995.Alcohol was the main or secondary cause of 207,800 NHS admissions in 2006/7,compared to 93,500 in 1995/96. The number of alcohol-related deaths in England…
A medical reported that the consumption of this product has many health benefits Describe how does this would affect the market for the product.
Consider the following box-and-whisker plot from Hall and Jones (2007). When focused on the youngest age group, a 20% increase in medical spending is associated with: FIGURE 3.1 Elasticity of health with respect to medical spending, by age. 0.5 - 0.4 - 0.3 - 0.2 - 0.1 - 20 40 60 80 100 Age Source: Hall and Jones, 2007. Note: “Whiskers" show standard errors of the estimates for each age group. 4% increase in conditional life expectancy 20% increase in conditional live expectancy O 8% increase in conditional life expectancy Elasticity of health with respect to medical spending
Please no written by hand solution In 1972 the U.S. Food and Drug Administration (FDA) began requiring all aspirin manufacturers to package aspirin in bottles with child-resistant protective caps, to make it much harder for children to open the bottles and thus reduce the number of young children who died from overdosing on aspirin. (Children apparently thought the aspirin was candy.) Rather than decreasing, the number of young children who died from overdosing on aspirin actually increased. Use the Economic Way of Thinking to carefully and completely explain why requiring this safety device led to an increase in the number of children overdosing on aspirin.
Prevalence of diabetes in Bradford: Does food labeling influences consumer decision towards healthy eating?
In 2010 the government’s main medical adviser drew up plans for a minimum price for alcohol intended to double the cost of some drinks.Under the proposal no drinks could be sold for less than 50 pence per unit of alcohol theycontain. This would mean most bottles of wine could not be sold for under £4.50. Theproposal is aimed at reducing alcohol abuse. A spokesman for an opposition party saidthat it was more important to deal with peoples’ attitudes and not just the price of alcohol.The Portman Group, set up by drinks manufacturers to promote sensible drinking, arguesthat it would damage the majority of drinkers who behave responsibly in terms of theirconsumption.The NHS bill for alcohol abuse is an estimated £2.7bn a year. Recent figures showhospital admissions linked to alcohol use have more than doubled in England since 1995.Alcohol was the main or secondary cause of 207,800 NHS admissions in 2006/7,compared to 93,500 in 1995/96. The number of alcohol-related deaths in England…
Discuss what is known about price elasticities of demand for various health care services. Needs to discuss acute, chronic, well, dentistry; hospital, ambulatory
In a commentary piece on the rising cost of health insurance, ("Healthy, Wealthy, and Wise," Wall Street Journal, May 4, 2004, A20), economists John Cogan, Glenn Hubbard, and Daniel Kessler state, "Each percentage-point rise in health-insurance costs increases the number of uninsured by 300,000 people." Assuming that their claim is correct, demonstrate that the price elasticity of demand for health insurance depends on the number of people who are insured. What is the price elasticity if 192 million people are insured? If 192 million people are insured, then the price elasticity of demand for health insurance is (Enter a numeric response using a real number rounded to three decimal places. Be sure to include the minus sign.) What is the price elasticity if 247 million people are insured? (Enter a numeric If 247 million people are insured, then the price elasticity of demand for health insurance is response using a real number rounded to three decimal places. Be sure to include the…
What are the purpose of individual enterepreneur? What are the few advantage or merits of individual enterepreneur?
Multiple choice 14. Mark is a Canadian lumberjack whose income increases from $1,200 per week to $1,500 per week. If his demand for restaurant meals rises from 2 to 4 per week then...Select one: a.Ey = 3 b.Ey = 0.5 c.Ey = 2.5 d.Ey = -1 15. Which of the following would help support the argument for legalizing drugs?Select one: a.None of the other choices b.The demand curve for illegal drugs in relatively elastic c.The demand curve for illegal drugs is relatively inelastic d.The demand curve for illegal drugs is perfectly elastic 16. The Philippines Government is thinking of increasing taxes on gasoline and cigarettes in order to raise tax revenue. This would...Select one: a.None of the above are correct b.Be a good idea if gasoline and cigarettes are inelastic goods c.Be a poor idea because people would stop consuming these goods d.Be a good idea if gasoline and cigarettes are elastic goods 17. If Exy > 0 then goods x and y areSelect one: a.Substitutes b.Normal goods c.Inferior goods…
How would you test the presence of multicollinearity?