Introduction in Economic Theory

Full, considered but precise answers necessitate approximately 4/5 sentences for each part of each question. This is only a guide of course since the nature of the questions varies. But one word, one sentence responses are unlikely to be satisfactory. Use common sense.
USE the uploades additional files to answer the questiona and as sources. Behind the quuestions you see which paper you need.

Bear in mind that we are not so much interested in your grasp of the details of specific issues covered here as in your understanding of the concepts and techniques used in the economic analysis. It is not important to understand the econometric modelling or the theoretical models within the attached papers. Concentrate on the main contributions and on the intuition that is provided around the formal analyses.

Part I – Taxes and Elasticities (25)
The first set of questions refers to paper A and its discussion (B and C).

Question 1 (4)
Why are taxes on alcohol often ineffective in leading to lower alcohol consumption?

Question 2 (3)
How do drinking patterns differ across gender and age in the United States (according to the cited results by study A)?

Question 3 (3)
Which kinds of studies are not included in the survey by Nelson?

Question 4 (4)
Summarize Nelson’s main findings.

Question 5 (6)
Explain why Ludbrook and others (B) criticise Nelson’s results.

Question 6 (5)
What is his reply to their criticism (C)?

Part II – Health Status and Working Hours (15)

The second set of questions refers to paper D.
Question 1 (5)
Which existing gap in the literature seeks this paper to fill?

Question 2 (5)
Name the theoretical channels through which the health status may influence the labour supply.

Question 4 (5)
What are the policy implications of the empirical findings by Cai and others?

Part III – Ageing of Population and health care expenditure (30)
The third set of questions refers to the paper by Zweifel and co-authors (E).

Question 1 (20)
Why should we expect that health care expenditures (HCE) tend to be higher in societies with an ageing population compared to non-ageing societies?

Question 2 (10)
What is the main argument of the authors against the assumption that HCE increase as predicted by others?

Part IV – Risk selection in the German health insurance system (30)
The fourth set of questions refers to the paper by Grunow and Nuscheler (F).

Question 1 (5)
Explain how premiums are set in the private versus the public insurance market. Identify the potential deficiencies resulting from this two-pillar system.

Question 2 (5)
How does the German government prevent public insurance companies from engaging in risk selection?

Question 3 (10)
Why do premiums increase over time in the private health insurance market? What is meant by the lock-in effect?

Question 4 (10)
The authors do not find that healthy persons are more likely to switch to the private insurance market. How do they explain this finding?

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