10 Suppose that the United States and the European Union impose a price ceiling on crude oil of $25 per barrel Explain, and illustrate graphically, how this would affect the markets for crude oil and for gasoline in the United States and in the European Union 11 Given that rent controls can actually hurt low-income people, devise a housing strategy that would provide affordable housing for those whose incomes fall below the poverty line (in 2004, this was about $19,000 for a family of four) 12 Using the model of demand and supply, show and explain how an increase in the share individuals must pay directly for medical care affects the quantity they consume Explain how this would address the total amount of spending on health care 13 Given that people pay premiums for their health insurance, how can we say that insurance lowers the prices people pay for health-care services? 14 Suppose that physicians now charge $30 for an office visit and insurance policies require patients to pay 33 1/3% of the amount they pay the physicians, so the out-of-pocket cost to consumers is $10 per visit In an effort to control costs, the government imposes a price ceiling of $27 per office visit Using a demand and supply model, show how this policy would affect the market for health care 15 Do you think the U.S health-care system requires reform? Why or why not? If you think reform is in order, explain the approach to reform you advocate NUMERICAL PROBLEMS Problems 1–4 are based on the following demand and supply schedules for corn (all quantities are in millions of bushels per year) Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 227