AZ approved 98 patients for organ transplants, but those patients have been told they can no longer receive transplants because of budget cuts. The state is facing a $1.5 billion budget deficit and has cut all of their state-funded lung transplants and some other transplants. AZ says the cuts will save $4.5 million this year.
On average, one organ transplant costs $262,900. AZ faced a tough decision: cut funding for all organ transplants or cut funding to provide vaccination services. On average, vaccination costs for one person's life span can cost at least $2500 (not including the administration fee or the federal excise tax).
1. a) Assuming that all transplant surgeries are successful, draw a graph that represents the decision that AZ faced. HINT: Make the x-axis the quantity of vaccines and make the y-axis the quantity of organ transplants.
b) On your graph, indicate the decision the AZ legislature took.
c) What concept does this graph represent?
d) Provide at least 3 arguments that support or explain your curve
2. What if CMS decides to require AZ to continue providing the same level of vaccination services AND cover organ transplants? Depict this decision on your graph and explain your reasoning.
3. You are now a member of the AZ legislature dealing with a real market (i.e. not everybody needing vaccines or decision isn't solely between funding transplants or vaccines). What would you have decided and why?