Hillary Has an Initial Endowment of $500 and Is Interested

question 38

Essay

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 $40, Hillary sees the doctor 4 times.After health care reform, a visit to the doctor will cost $10 but her taxes will rise by $160.
a.Explain what conditions are necessary for Hillary to be made better off by health care reform.
b.Is it possible to tell whether Hillary has been made better off with the given information?
c.Explain what conditions are necessary for Hillary to be made worse off by health care reform.
d.Is it possible to tell whether Hillary has been made worse off with the given information?

---

Definitions:

Operant Conditioning

A learning process through which the strength of a behavior is modified by reinforcement or punishment.

Behavioral Perspective

An approach in psychology focusing on observable behaviors and how environmental interactions shape them.

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired; a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.

Self-Efficacy

The belief we have in our ability to succeed in a specific task or situation.