Principles of Microeconomics California Edition 2nd Edition
2nd Edition
ISBN: 9780393622089
Author: Dirk Mateer, Lee Coppock
Publisher: W. W. Norton
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Question
Chapter 18, Problem 4QR
To determine
Increasing medical expenditure and the marginal product of medical care.
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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?
How does the law of supply and demand apply
to the growing success of the urgent care
medical market in the United States?
The price elasticity of demand for health care has been estimated to be −0.2. Characterize this demand as price elastic, unit price elastic, or price inelastic. The text argues that the greater the importance of an item in consumer budgets, the greater its elasticity. Health-care costs account for a relatively large share of household budgets. How could the price elasticity of demand for health care be such a small number?
Chapter 18 Solutions
Principles of Microeconomics California Edition 2nd Edition
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- improvement in technology usually result in lower cost of production or new and improved consumer goods and services .Assume that an improvement in medical technolgy result in an increase in life expectancy for people 65 years and older . How would this technolgical advance be likely to affect expenditure on health care?arrow_forwardWhat 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
- Is Canadian government spending on health care a direct expenditure or a transfer payment? How can you tell?arrow_forwardPrice elasticities of the demand for health care are usually much lower (in absolute terms) at the individual provider level than at the aggregate level. a.True b.Falsearrow_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
- Demand studies in health care have provided estimates of both income and price elasticity. Estimates of income elasticity are usually above +1.0. Estimates of price elasticity typically range between -0.1 and -.75 (with hospital services at the lower end and elective services at the upper end). What information do these estimates convey? What does the price elasticity of demand estimates imply for government policymakers, insurance companies, and medical providers' decisions? What does the income elasticity of demand estimates imply for government policymakers, insurance companies, and medical providers' decisions?arrow_forwardSuppose 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_forwardWhat is the economic rationale for single payer health insurance? Discuss the economic principles that are most relevant.arrow_forward
- explain why the basic framework of supply and demand is not sufficient to analyze the market for health care.arrow_forwardDiscuss your views on the effect of price on the demand for urgent or non-urgent medical care. Justify how access to care may be related to the value of good health.arrow_forwardlist and describe various economic and societal factors that affect demand and pricing for health care services in today's marketarrow_forward
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