1. (8 points, 4 parts) Acupuncture and prescription drugs are two alternative inputs into improving health for individuals who suffer from migraine headaches. The health production function is give by the following equation:
M=2A+3.5R where M stands for units of migraine pain improvement, A stands for units of acupuncture treatment and R stands for migraine prescription pills.
a)Please draw the health production graph implied by this equation, for some given level of M. Please label fully. (l.e. you can hold M.constant at 10 or whatever other number you wish, and draw the possible combinations of A and R that makes that level of M possible).
b)According to this equation, which is more effective (higher marginal productivity): one unit of acupuncture or one unit of prescription medication? How do you know?
c)More specifically, how many units of A would someone have to give the patient to keep them equally well off if we took away one unit of R from their treatment regimen? And how many units of R would someone have to give the patient to keep them equally well off if we took away one unit of A from their treatment regimen?
d)Suppose that treatments changed and it was discovered that A and R are complements, and the equation was now framed as M=min (A,0.5R). Please draw the new graph implied by this equation.
