Health Economics
14th Edition
ISBN: 9781137029966
Author: Jay Bhattacharya
Publisher: SPRINGER NATURE CUSTOMER SERVICE
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Question
Chapter 2, Problem 11AP
(a)
To determine
The arc price elasticity of
(b)
To determine
The effect of a higher income in Tokyo than Hokkaido on arc price elasticity of demand.
(c)
To determine
The effect of change in price per visit on the demand for health care.
(d)
To determine
Price elasticity of demand for healthcare in Japan.
(e)
To determine
Calculate the elasticity of demand for healthcare for Tokyo and Hokkaido separately.
(f)
To determine
The effect of an increase in price on the demand for healthcare.
(g)
To determine
The combined elasticity of demand for Tokyo and Hokkaido.
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1. Given the following two tables.
*Image Provided*
a.) Calculate the elasticity of demand for health care for Tokyo and Hokkaido separately.
b.) Using your estimated elasticities, what would the demand for health care in each prefecture be if the price were raised to 40 ¥ per visit next year (for both prefectures)?
Demand falls by 5 percent for every 10 percent increase in price health care services. How much is the won price elasticity of demand for health care?
Suppose that a study finds that the price elasticity of demand for MRI's is 0.3 (in absolute value). If the price of care were to ___ by 3%, we would expect the quantity of preventative care consumed to fall by ____%.
Suppose that a study finds that the price elasticity of demand for MRI's is 0.3 (in absolute value). If the price of care were to ___ by 3%, we would expect the quantity of preventative care consumed to fall by ____%.
a. fall; 0.3%
b. rise; 0.9%
c. rise; 0.3%
d. fall; 0.9%
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Similar questions
- Suppose the income elasticity of demand for health care insurence is 0.3. If the level of income decreasesd by 1 percent , The demand for health insurence will 1.rise By.29 percent 2.rise by 0.3 percent 3.Fall by .29 percentarrow_forwardSuppose you are collecting data from a country like Japan where the government sets the price of healthcare. Each prefecture in Japan has a different set of prices (for example, Tokyo has higher prices than rural Hokkaido). Data for 1999 are displayed in the table below. Region Outpatient Visits per Month Price per Visit Tokyo 1.25 25 Hokkaido 1.75 15 (4 points) What is the arc price elasticity of demand for health care consumers in Japan (using only these data)? (4 points) Suppose that incomes are generally much higher in Tokyo than Hokkaido. Is your answer to the last question an overestimate or underestimate of price elasticity? Justify your answer. (c) (4 points) Using your estimated elasticity, what would the demand for health care be if the price in Tokyo were raised to 30 per visit? What would the demand in Hokkaido be if the price were lowered to 5 per visit?arrow_forwardDoes perfect competition provide an advantage or disadvantage to the consumer and to the health care provider/organization? Provide an example of perfect competition within health care.arrow_forward
- What is the impact of aging societies like Japan and some other European countries on the demand for health services?arrow_forwardDo countries with national health insurance programs have lower average medical costs than the United States? Is cost of care correlated with quality of care?arrow_forward
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