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
(b)
To determine
The effect of a higher income in Tokyo than Hokkaido on arc price elasticity of
(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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Students have asked these similar questions
Outpatient
Price per
Region
Tokyo
Visits
Visit
1 per month
25 Yen
Hokkaido
1.5 per month
10 Yen
What is the arc price elasticity of demand for health care in Japan based on these
data?
a.
c. Using your estimated elasticity from part a, what would the demand for health
care be if the price in Tokyo were raised to 30 Yen per visit?
d. Using your estimated elasticity from part a, what would the demand in Hokkaido
be if the price were lowered to 5 Yen per visit?
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?
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?
Knowledge Booster
Similar questions
- a. What is the arc price elasticity of demand for healthcare consumers in Japan using only this data? b. 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? Region Outpatient visits Price/ visit Tokyo 1.25/ month 20Y Hokkaido 1.5/ month 10Yarrow_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_forwardSuppose you are collecting data from a country like Japan where the government sets the price of health care. Each prefecture in Japan has a different set of prices (for example, Tokyo has higher prices than rural Hokkaido). Data for 1999 is displayed in Table 2.12. Table 2.12. Outpatient utilization in Tokyo and Hokkaido, 1999. Region Outpatient Visits Price/Visit Tokyo 1.25/month 20 Japenese Yen Hokkaido 1.5/month 10 Japanese Yen What is the arc price elasticity ofdemand for health care consumers in Japan (using only this data)?arrow_forward
- How does the law of supply and demand apply to the growing success of the urgent care medical market in the United States?arrow_forwardSuppose the government imposes a system of price ceilings in the health care industry as part of an overall health care reform bill. a) draw a graph of the health care market and show equilibrium price and quantity. b) assume the government imposes an effective price ceiling in the health care market. Show the price ceiling in your graph. Indicate what will happen to quantity demanded and quantity supplied of health over time ? c) would a shortage or surplus result ? I llustrate in your graph.arrow_forward8arrow_forward
- 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%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_forward1. Given the following two tables: Table 2.12: Outpatient utilization Table 2.13: Outpatient utilization in Tokyo and Hokkaido, 1999. in Tokyo and Hokkaido, 2000. Region Outpatient visits Price/visit Region Outpatient visits Price/visit Tokyo Hokkaido 20¥ 1.25/month 1.5/month Tokyo Hokkaido 30¥ 1.0/month 1.2/month 10¥ 15¥ 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 ¥ visit next year (for both prefectures)? perarrow_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_forward1. Given the following two tables: *Provided image of the tables* 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)?arrow_forward
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