Explain the law of supply. What does the law of supply imply ...

[chads108]

Explain the law of supply. What does the law of supply imply about the shape of the supply curve?
 
  What will be an ideal response?

Question 2

Oregon expanded its Medicaid coverage in 2008 . Roughly 90,000 people applied but the state had funds to cover only an additional 30,000 people (who were randomly chosen from the total applicant pool of 90,000).
 
  How could you use the Oregon experience to estimate the impact of increased access to health care on health outcomes?

[Melissahxx]

Answer to Question 1

The law of supply describes the positive relationship between price and quantity supplied. All else equal, as the price of a good rises, the quantity supplied of the good rises as well. As the price of a good falls, the quantity supplied falls. This implies that the supply curve will be upward sloping.

Answer to Question 2

The Oregon experience is a natural experiment. The state chose people randomly from the pool of applicants, and so on average the new Medicaid recipients were very similar to the people who applied but were turned down. By tracking the health outcomes of people in these two groups we can study the effect of better access to health care.
See Medicaid Access Increases Use of Care, Study Finds, New York Times, May 1, 2013 (http://www.nytimes.com/2013/05/02/business/study-finds-health-care-use-rises-with-expanded-medicaid.html?_r=0).

[chads108]

Thank you

[Melissahxx]

No problemo