Discussion Question

Given the data below, what can be learned about the price elasticity of medical care services? What other information would you want to have for calculating the price elasticity of medical care services?

Data Set

Average price per service (indexed in 1982-84 dollars) and total dollars (in millions of chained dollars) spent on medical care services, monthly, Jan.1969 – Oct. 2000.

Source: Bureau of Labor Statistics and Bureau of Economic Analysis

Data provided by Economy.Com (http://www.freelunch.com)

Advanced Questions

What does the price elasticity of medical care services suggest about the behavior of consumers of these services?  What does the price elasticity of medical care services imply about the proper role of the government in the provision of health care services?  What other factors besides price elasticity should be considered when contemplating the role of government in the provision of medical care services?