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Economic Analysis of Social Issues 1st Edition by Alan Grant
Edition 1ISBN: 978-0134098371Economic Analysis of Social Issues 1st Edition by Alan Grant
Edition 1ISBN: 978-0134098371 Exercise 2
Consider problem, IfGus and Eleanor split the cost of therapy equally, is their predicted behavior socially optimal? Explain why or why not. How much of a deductible would their agreement require in order to generate a socially ideal outcome?
Gus and Eleanor run marathons together. Alter a marathon, each requires physical therapy to recover. The first visit brings each $100 of benefit; the second brings $40. Each visit costs $70. How many visits will Gus and Eleanor schedule if they pay for their own therapy? How many visits will they schedule if they split the cost of therapy equally?
Gus and Eleanor run marathons together. Alter a marathon, each requires physical therapy to recover. The first visit brings each $100 of benefit; the second brings $40. Each visit costs $70. How many visits will Gus and Eleanor schedule if they pay for their own therapy? How many visits will they schedule if they split the cost of therapy equally?
Explanation
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Given information:
• Person G's benefit...
Economic Analysis of Social Issues 1st Edition by Alan Grant
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