A model of the determinants of health combines three economic variables and two economic relationships.
For instance, the three economic variables are:
The amount a patient pays for a visit to a physiotherapist (P);
The number of times the patient visits the physiotherapist (V); and
The length of time it takes the patient to recover from a rotator cuff (shoulder)
injury (D) (max. = 365 days).
The two economic relationships are:
The number of visits (V) = 18 – $0.09 (P).
In other words, if the price is zero, the patient will make 18 visits in order to receive treatment for this injury. If the price is $200, the patient will make zero visits.
The number of days to recover (365 – D).
In this case, the number of healthy days (D) in the next year will be 180 + 5V. If the number of visits is zero, the patient will have 180 healthy days and it will take 185 (365 – 180) days to recover from the rotator cuff injury. If the number of visits is 18, the patient will have 270 [180 + 5(18)] healthy days, and the time to recover from the injury will be 95 days (365 – 270).
Use the above information to determine the relationship between price and health status in this model. In other words, solve for D and for P, and set up two equations: one showing the value of D in terms of P; and one showing the value of P in terms of D. Once you have determined the two equations, provide an interpretation of each equation.
(2). Year Population of Canada Physicians in Canada Physician Services (thousands)
2002 31,577,000 56,080 520,800
2003 31,988,700 58,230 558,500
2004 32,509,000 59,850 570,200
2005 33,037,000 60,925 589,300
a. Calculate the number of…