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EEP 145 Problem Set 4 Due Dec 5 Questions labelled as T/F should be marked as True or False. Your answer should be justied in several sentences....

could you please figure out question no. 7 ?

please please

EEP 145 Problem Set 4 Due Dec 5 Questions labelled as T/F should be marked as True or False. Your answer should be justifed in several sentences. Points will be awarded based in part on the reasoning behind your answers. 1. T/F Ransom and Pope (1995) use the unexpected closing o± a steel mill in Utah Valley to estimate the e±±ect o± air pollution on hospitalizations. Because the shut down o± the steel mill was unexpected, it is su±fcient to simply measure the change in hospitalizations in Utah Valley ±rom the year be±ore the steel mill shuts down to the year a±ter the steel mill shuts down. There is no need to compare this change to the change in hospitalizations in the neighboring Cache Valley. 2. T/F Currie and Walker (2010) use the implementation o± E-ZPass electronic toll collectors to estimate the e±±ect o± air pollution on in±ant birthweight. However, they have no data on air pollution levels near toll booths. This makes it impossible ±or them to conclude that air pollution is having an e±±ect on in±ant birth weights. 3. T/F Anderson and Matsa fnd that access to restaurants has no (substantial) causal e±±ect on obesity. This implies that i± a normal weight individual were to start eating every meal at McDonald’s, he or she would not gain weight. 4. T/F Bollinger et al (2011) compare changes in Starbucks purchases in New York (where a calorie posting law took e±±ect) to changes in Starbucks purchases in Philadelphia and Boston (where no calorie posting law took e±±ect). One ±actor that is sure to cause bias in their study is that people purchase higher calorie drinks during the holidays than they do during other times o± the year. 5. T/F A mandate requiring all jobs to provide health insurance has similar impacts to a plan imposing an income tax to ±und a government health insurance plan that covers all workers (assume the insurance plans are identical in both cases). Either way, workers are ultimately the ones that pay ±or the insurance coverage. 6. T/F Suppose that you can prove that the cost o± all cardiac treatment per±ormed in the United States last year totaled $100 billion but that the benefts o± this same treatment (in terms o± longer lives) totaled $150 billion. I± we wish to maximize net benefts, this beneft-cost ratio implies that we should per±orm even more cardiac procedures. 7. T/F Suppose that it costs a frm $5,000 per employee to provide health insurance (and suppose that the implicit tax subsidy ±or benefts is repealed). It must be pre±erable that the frm drop health insurance and instead pay each employee an
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extra $5,000. After all, cash is king: if an employee values health insurance at more than $5,000, then s/he can use the $5,000 to purchase insurance, and if an employee values health insurance at less than $5,000, then s/he can pocket the $5,000.
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Question 7.docx

Suppose that it costs a firm $5,000 per employee to provide health insurance
(And suppose that the implicit tax subsidy for benefits is repeated). It must be
Preferable that the firm drop health...

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