Search Results: 'Deadweight loss'
Calculation of Deadweight Loss in Health Insurance
Let’s say there’s a world-wide influenza pandemic. Assume that the marginal cost (supply) of influenza vaccinations is constant at $40. Assume that everyone in society has health... More > insurance that pays 80% of all medical services, including flu shots. Draw a market demand for flu shots and show graphically what the socially optimal number of flu shots is (not considering lives saved). Show how many flu shots will be provided in this market given the insurance. Show the deadweight loss caused by the health insurance.< Less
Analysis of Externality
a) What type of externality does the graph below represent? Using the letters provided calculate social welfare under the market outcome and the socially optimal outcome. Describe and show the... More > deadweight loss.< Less