Economics 236 - Health Economics & Policy Problem Set 4-
1) Agree or disagree; DEFEND your answer.
a) In a recent study, Joe Newhouse found that the case mix in the United States and Canada was quite similar in the late 1970s and very early 1980s. The case mix in the United States became significantly worse after 1982. This means that Americans suddenly became sicker.
b) The major purpose of medical malpractice insurance is to provide financial relief for people who are injured by medical care going awry, and it does this very well.
2) Use graphs and explain if the following arguments are true or false:
a) A cigarette tax makes a lot of sense, if we are interested in achieving the efficient level of cigarette consumption in a society. Without the tax smokers are probably smoking too much.
b) A subsidy for the vaccination of poor children makes a lot of sense, if we are interested in achieving the efficient level of vaccination in a society. Without the subsidy children probably don't get enough vaccines.