Suppose 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.
a. What is the arc price elasticity of demand for health care consumers in Japan (using only this data)?
b.
Unit 1: Application Assignment X M Inbox - 1688370@park.edu - Pa X MBS Digital Shelf X MBS Direct: Health Economics X * Course Hero X + X -CA A https://mbsdirect.vitalsource.com/#/books/9781 137029973/cfi/49!/4/4@0.00:61.8 150% . .. V E Dashboard M Park Email | My Park C Canva @ Foremost Insurance @ Walmart SAPA Pirate Search Bookstore Other Bookmarks 1I Suppose you are collecting data ITOIII a country like Japan where the government sets the price of health care. Each prefecture in Japan has a different set of prices (for A 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 20Y Hokkaido 1.5/month 10Y BY a What is the arc price elasticity of demand for health care consumers in Japan (using only this data)? b 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. [ Hint: It may be helpful to plot the data points from Table 2.12 and consider likely demand curves for Tokyo and Hokkaido.] NS Type here to search O a W 9:58 AM 3/17/2021Unit 1: Application Assignment X M Inbox - 1688370@park.edu - Pa X MBS Digital Shelf X MBS Direct: Health Economics X * Course Hero X + X -CA A https://mbsdirect.vitalsource.com/#/books/9781 137029973/cfi/50!/4/4@0.00:4.37 150% . .. V E Dashboard M Park Email | My Park @ Canva @ Foremost Insurance @ Walmart SAPA @ Pirate Search Bookstore Other Bookmarks A c Using your estimated elasticity, what would the demand for health care be if the price in Tokyo were raised to 30Y per visit? What would the demand in Hokkaido be if the price were lowered to 51 per visit? You continue your observations of the Japanese health care system into the year 2000. For inscrutable reasons having to do with internal Japanese politics, the government changed the price in both Tokyo and Hokkaido that year, and you observe the demand recorded in Table 2.13. Table 2.13. Outpatient utilization in Tokyo and Hokkaido, 2000. Region Outpatient visits Price/visit Tokyo 1.0/month 30Y Hokkaido 1.2/month 15Y d Calculate the price elasticity of demand for health care in Japan using only data NS from the year 2000. e Use data from both years to calculate the elasticity of demand for health care for Tokyo and Hokkaido separately. Type here to search O a W ? 9:58 AM 3/17/2021
