to answer three questions regarding simultaneous shifts of demand curve and supply curve. How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is, do price and quantity rise, fall, or remain unchanged, or are the answers indeterminate because they depend on the magnitudes of the shifts? Download and get a print out of the attached file. Then draw supply and demand curves on it using a pen in the space provided below to support your answers and upload a picture of the page on this link within the due date. Thank you.

1. Demand increases and supply increases.

2. Supply increases and demand decreases.

3. Demand decreases and supply decreases

I was able to get questions 1 - 4 answer and only need question 5 and its sub-parts.

Asymmetric Information and Separating Equilibrium

A population has two equal-sized members of "healthy" and "unhealthy" individuals. Members of each type have the same, identical, utility function: U = 20Y0.5 (i.e. 20 x Y raised to the 0.5 power), where Y is annual income.

Assume each individual, in either group, has disposable income (after normal expenses) of $19,000 a year. If in need of major medical care (and does not have insurance), each individual will have $15,000 in medical expenses. A "healthy" individual has a 6% probability, while an "unhealthy" individual has a 18% probability, of requiring major medical care.

Use the information above to answer the questions (1 through 5) below.

NOTE: An actuarially fair insurance premium (AFIP) is always calculated as: AFIP = (Medical expenses covered) x (Probability of occurring).

1. Calculate the AFIP of the full-coverage policy for a "healthy" individual.

2. Calculate the AFIP of the full-coverage policy for an "unhealthy" individual.  

3. Calculate the AFIP of a deductible policy for a "healthy" individual, for which the deductible is equal to $12,000.

4. Calculate the AFIP of a deductible policy for an "unhealthy" individual, for which the deductible is equal to $12,000.

5. Suppose health status ("healthy" or "unhealthy") represents asymmetric information: Each individual knows her or his health status, but insurance companies do not.  

Now, suppose an insurance company offers only two types of policies: 1) a full-coverage policy with premium equal to the most expensive (regardless of insurance type) of the two full-coverage policies.

a. In the boxes below, calculate expected utility for a "healthy" individual, for each scenario:

No Insurance:

Most Expensive Full-Coverage Policy (Option 1):

Least Expensive Deductible Policy (Option 2):

b. In the boxes below, calculate expected utility for an "unhealthy" individual, for each scenario:

No Insurance:

Most Expensive Full-Coverage Policy (Option 1):

Least Expensive Deductible Policy (Option 2):

c. Based on your answers in 5a. and 5b., which option would a representative member of each group (i.e. "healthy" and "unhealthy") choose?

d. In the box below, enter the insurance company's expected economic profit from selling the desired policy (from the individual's perspective) to a member of each group.

Expected Profit from "Healthy":

Expected Profit from "Unhealthy":

(a) Complete the blank columns.

(b)    Assume the price of this product equals $10. What’s the profit-maximizing output (q)?  Note: managers maximize profits by setting MR=MC and under perfectly competitive markets, MR=Price. Thus, maximize profit by producing q where P=MC.

(c)    What is the profit?

Discuss the causes and implications of the “nursing shortage” and discuss whether it is really a “shortage” as economists understand the term.

On the topic of workplace safety, describe the situation of employee rights in the era around 1900, and how those rights have changed since that time period.

What were the most important economic and social effects of the invention of the printing press? Was the printing press good or bad in the long-run for Europe?

XYZ Cable Co. is trying to decide whether to bundle 2 channels: its “Sports” channel and its “History” channel. It has identified 2 type of customers who regularly subscribe to these channels, “Sports Nuts” and “History Buffs”.

Below is the willingness to pay of Sports Nuts and History Buffs for each of the channels.

Assuming that the incremental cost of serving 1 more customer for both channels is zero:

1. If you decide to have a separate price for each channel (2 prices), what is the optimal price and what are your profits? What is the consumer surplus? Show your calculations.

2. If you decide to bundle the 2 channels, what is the optimal price and what are your profits? What is the consumer surplus? Show your calculations.

You own 2 restaurants serving the exact same type of food.   The menus of meals and drinks served are exactly the same.

Suppose that the costs of each restaurant are exactly the same.

Suppose further that the number of potential customers for each restaurant is exactly the same.

One restaurant is located in a wealthier section of town; one restaurant is located in a poorer section of town.

1. Should each restaurant have the same prices on their menus or different prices at each location? If different prices, which restaurant should have the higher prices and which restaurant should have the lower prices? Why?

2. How does your pricing policy above benefit you? Explain why.

1. Ore-Ida is the one of the largest potato processors in the world. Explain why Ore-Ida buys it potatoes from farmers instead of growing potatoes itself?
2. Why would Ikea, a wood furniture and home furnishings manufacturer, buy forests and woodlands?

John is an accountant and just earned your CPA. John has decided to open up John’s Tax Service on Main Street. He leases a storefront:   his office in the storefront has glass all around it. John has hired an administrative assistant who sits outside his office. His administrative assistant answers phones, receives and sends emails, sets appointments and other administrative type work. Assuming that John spends most of his time inside the office, should John pay his administrative assistant an hourly wage, piece rates or a % or profits? Explain why.

a market has a demand curve p= 700- 2q. the supply curve for the market which is also the monopolists marginal cost curve is given by p= 100 + q. calculate the change in quantity, price, consumer surplus, and producer surplus going from a perfectly competitive market to a monopoly

Does the official unemployment rate overstate the true level of unemployment, understate the true level of unemployment or accurately measure the true level of unemployment? Be certain to clearly and carefully explain your answer.

In the book "The Shifts and the Shocks" by Martin Wolf, of Chapter 4 How did finance become fragile? What was the reason?