velue 750 points Samantha t o hospital recovery time tolowin

velue 7.50 points Samantha\' t o hospital recovery time tolowing her upcoming surgery is $300 for the first day,$200 for the second,$100 for the third,$50 for the fourth, and nothing for a. f Samantha l uninsured, and the coet of providing a hospitai room s $250 per day, how many days will he stay in the hospital folwing her operation?dayto) b. How many days would Samantha stay i her insurance covered half the cost of each hospital day? c Now suppose that Samantha\'s insurance stops covering hospital stays and instead reduces the cost of her health insurance by $225 How many days would Samantha stay in the hospital under this new policy? Relative to part b, is Samantha better off under this poliay?(Cck to st day(s) MacBook Air 9

Solution

1. She will stay for only 1 day since for the second day her willingness to pay is 200$ which is less than 250 .

2. She will stay for 2 days since half of 250 is paid by insurance and her willingness to pay was 200 which is more than half of 250 .

3. She saves 225$ . So she can afford to stay till the 3rd day . Total willingness = 300+200+100 = 600 . Total expense = 250×3 = 750 . Actual payment = 750 - 225 = 525 .

She is better off under this policy .

Insurance company first had to pay 250 ( half for 2 days) . Now is paying 225 . So company is also better off