Question

In: Economics

According to the Grossman Model, as people age their optimal health capital will

According to the Grossman Model, as people age their optimal health capital will



A.            Rise



B.            Fall



C.            Stay the same



D.            The Grossman Model modeled demand for insurance

Solutions

Expert Solution

Ans) the correct option is b) fall

Health capital decreases because the depreciation rate of health capital continues to rise.

Rahul Sunny answered 1 year ago
Next > < Previous

Related Solutions

Using Grossman model explain what would happen to the demand for health stock as people get...
Using Grossman model explain what would happen to the demand for health stock as people get older and their preferences for health change. Assume that older people value health more than younger people. Draw a figure showing initial MEI, Marginal Costs and initial level of health stock. Then demonstrate appropriate changes/shifts in MEI, MC, and optimal level of health stock relative to the initial. Upload your picture here.
Present the Grossman Model for the Demand for Health and health care. Discuss its predictions for...
Present the Grossman Model for the Demand for Health and health care. Discuss its predictions for the demand for health and health care.
Using Grossman model explain what would happen to the demand for health stock.Assume that John was...
Using Grossman model explain what would happen to the demand for health stock.Assume that John was working as a construction worker that is a very physically demanding job (meaning high depreciation rate of health). He was able to find another job in an office that would provide the same income but it is much safer and less physically exhausting meaning that his health depreciation rate is now lower. What would happen to John's demand for health stock? Draw a figure...
Trade in Tasks and the Grossman and Rossi-Hansberg (2008) model Grossman and Rossi-Hansberg (2008) present a...
Trade in Tasks and the Grossman and Rossi-Hansberg (2008) model Grossman and Rossi-Hansberg (2008) present a simple extension to the Heckscher-Ohlin- Samuelson model which allows firms to relocate the low-skilled labor-intensive parts of the production process to a low-wage country. In other words, they present a simple model of offshoring, intermediate input trade, or global value chains (GVCs). Besides the mathemat- ical model, the authors also introduce the concept of trade in tasks, as they view production as a chain...
Trade in Tasks and the Grossman and Rossi-Hansberg (2008) model Grossman and Rossi-Hansberg (2008) present a...
Trade in Tasks and the Grossman and Rossi-Hansberg (2008) model Grossman and Rossi-Hansberg (2008) present a simple extension to the Heckscher-Ohlin- Samuelson model which allows firms to relocate the low-skilled labor-intensive parts of the production process to a low-wage country. In other words, they present a simple model of offshoring, intermediate input trade, or global value chains (GVCs). Besides the mathemat- ical model, the authors also introduce the concept of trade in tasks, as they view production as a chain...
Trade in Tasks and the Grossman and Rossi-Hansberg (2008) model Grossman and Rossi-Hansberg (2008) present a...
Trade in Tasks and the Grossman and Rossi-Hansberg (2008) model Grossman and Rossi-Hansberg (2008) present a simple extension to the Heckscher-Ohlin- Samuelson model which allows firms to relocate the low-skilled labor-intensive parts of the production process to a low-wage country. In other words, they present a simple model of oshoring, intermediate input trade, or global value chains (GVCs). Besides the mathemat- ical model, the authors also introduce the concept of trade in tasks, as they view production as a chain...
People who earn a higher salary can afford more goods, including healthcare. However, according to Grossman,...
People who earn a higher salary can afford more goods, including healthcare. However, according to Grossman, they will choose a higher desired health stock. Why?
according to the pecking-order theory, there is no optimal capital structure. explain why!
according to the pecking-order theory, there is no optimal capital structure. explain why!
What is a firm’s optimal capital structure according to the tradeoff theory? a. 100% equity b....
What is a firm’s optimal capital structure according to the tradeoff theory? a. 100% equity b. 100% debt c.50%equity and 50% debt d.mix of debt and equity where the marginal cost of debt equals to the marginal cost of equity e. mix of debt and equity where marginal benefit of debt equals to marginal benefit of equity what is the firm’s optimal capital structure according to MM theory with corporate tax? a. 100% equity b. 100% debt c.50%equity and 50%...
Trigleater is a hungry individual in the Grossman model deciding what to have for dinner is...
Trigleater is a hungry individual in the Grossman model deciding what to have for dinner is looking at variable options. Trigleater has a special condition called "Eaterblood" where whatever she eats will affect her health almost immediately. The following table reflects the options she is considering and the effect on health Meal Home Good Z Health H Steak and eggs +9 -4 Kale salad and broccoli -5 +18 Double cheeseburger deluxe with coke 12 -18 A miracle pill "Actosfast" is...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT