Hillary Has an Initial Endowment of $500 and Is Interested

question 23

Multiple Choice

Hillary has an initial endowment of $500 and is interested in two things: how many visits she can make to the doctor and how much money will be left over to spend on other things.When a trip to the doctor costs $50, Hillary sees the doctor 7 times.After health care reform, a visit to the doctor will cost $10 but her taxes will rise by $360.

• A)Hillary will be made better off by health care reform.
• B)Hillary will be made worse off by health care reform.
• C)We cannot tell how health care reform will affect Hillary.
• D)Hillary violates the Weak Axiom of Revealed Preference.
• E)Hillary violates the Strong Axiom of Revealed Preference.

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Definitions:

Cholelithiasis

Stones in the gallbladder.

Colitis

Inflammation of the inner lining of the colon, often causing discomfort and diarrhoea.

Incontinent

Unable to control the bladder or bowel.

Anus

The opening at the end of the digestive tract through which feces leave the body.