Question

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 11 Table 2.12. Outpatient utilization in Tokyo and Hokkaido, 1999. RegionOutpatient visits Price/visit Tokyo Hokkaido 1.5/month 20Y 1ΟΥ 1.25/month What is the arc price elasticity of demand for health care consumers in Japan (using only this data)? 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.] a b

Need help, YOU DONT HAVE TO DO A OR B. I understand those. Its mainly D through G that I have trouble with. Feel free just to do those.

Answer 1