Arizona approved 98 patients for organ transplants, but those patients have been told they can no longer receive the transplants because of budget cuts. The state is facing a $1.5 billion budget deficit and has cut all of their state-funded lung transplants and some other transplants. Arizona says the cuts will save $4.5 million this year.
On average, one organ transplant costs $262,900. Arizona faced a tough decision: cut funding for all organ transplants or cut funding to provide vaccination services. On average, vaccination costs for one person's life span can cost at least $2500. (This is not including the administration fee or the federal excise tax.)
1. a) Assuming that all transplant surgeries are successful, draw a graph that represents the decision that Arizona faced. HINT: Make the x-axis the quantity of vaccines and make the y-axis the quantity of organ transplants.
b) On your graph, indicate the decision the Arizona legislature took. - I believe Arizona chose to cut all organ transplant funding.
c) What concept does this graph represent? - I believe the graph would represent the Production Possibilities Frontier concept.
d) Provide at least 3 arguments that support or explain your curve.
2. What if CMS decides to require Arizona to continue providing the same level of vaccination services AND cover organ transplants? Depict this decision on your graph and explain your reasoning.
3. You are now a member of the AZ legislature dealing with a real market ( i.e. not everybody needs vaccine, decision isn't solely between funding transplants or vaccines). What would you have decided and why?