Give 2 examples in which the patient has information that is not available to the physician. (3 points)
7) A new insurance mandate in the city of Rosemary requires employers to provide their employees with balding insurance. The cost to employers is $1.00/hour; the value to employees is $1.50/hour. Show graphically the new labor market equilibrium indicating the wage and employment impacts. (6 points)
8) Is the size of the externality caused by smoking different in states where unions negotiate common wages for all employees in a company versus states in which there are no unions? Discuss. (Assume the states are otherwise identical)
9) You notice that people in areas where residents are healthier on average tend to donate more money for city parks than people in areas where residents are less healthy. Can you conclude that health increases altruism? Discuss.
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