Green Valley Mills produces carpet at plants in St. Louis and Richmond. The carpet is then shipped to two outlets, located in Chicago and Atlanta. The cost per ton of shipping carpet from each of the two plants to the two warehouses is as follows:

To(cost)

From Chicago Atlanta

St louis $40 $65

Richmond 70 30

The plant at St. Louis can supply 250 tons of carpet per week; the plant at Richmond can supply 400 tons per week. The Chicago outlet has a demand of 300 tons per week, and the outlet at Atlanta demands 350 tons per week. The company wants to know the number of tons of carpet to ship from each plant to each outlet in order to minimize the total shipping cost. Solve this transportation problem.

Consider how health insurance affects the quantity of health care services performed. suppose that the typical medical procedure has a cost of $160, yet a person with health insurance pays only $40 out of pocket. her insurance company pays the remaining $120. (the insurance company recoups the $120 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undergo.) consider the following demand curve in the market for medical care. use the black point (plus symbol) to indicate the quantity of procedures demanded if each procedure has a price of $160. then use the grey point (star symbol) to indicate the quantity of procedures demanded if each procedure has a price of $40. q d at p=$160 q d at p=$40 0 10 20 30 40 50 60 70 80 90 100 200 180 160 140 120 100 80 60 40 20 0 price of medical procedures quantity of medical procedures demand if the cost of each procedure to society is truly $160, the quantity that maximizes total surplus is procedures. economists often blame the health insurance system for excessive use of medical care. given your analysis, the use of care might be viewed as excessive because consumers get procedures whose value is than the cost of producing them.