MGEB02H3 Study Guide - Midterm Guide: University Of Toronto Scarborough, Graph Labeling, Utility

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Question-1 [35 points] answer the following short questions: [4 points] during the last two decades or so the cost of health care has risen dramatically. For the same time period the quantity of health care provided has risen as well but not as dramatically as the cost. Use a demand and supply framework to show why. The demand has shifted out but the supply has shifted in due to the dramatic rise in the cost of equipment and labor employed in the health care. The result is quantity has increased but not as much as the cost: [4 points] using the following graph, what can you conclude about the relation between x and. X and y are complement since a decline in the change in the price of x leads to an increase in the demand for y. Page 2 of 2: [7 points] graph the indifference curves for the following two cases: