Consider the Grossman model for this question. Suppose an individual A has higher level of education than the individual B, and hence, individual A earns twice as much as individual B If both individuals work enough hours to exactly earn $60 000 per year, who will have greater Health? Why?

Consider the Grossman model for this question. Suppose an individual A has higher level of education than the individual B, and hence, individual A earns twice as much as individual B

If both individuals work enough hours to exactly earn $60 000 per year, who will have greater Health? Why?

 

 

Answer:

According to the Grossman model, health depends on many factors and not just medical care. Grossman views health in the form of consumption and investment good. A person with higher education and a higher income is likely to spend more money on healthcare.Thus, individual A is more likely to have better health than individual B.

Asked on February 15, 2018 in economics.
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