Question

1. What would likely cause a leftward shift in demand for clinic visits for routine non-emergency check-ups?

1. Fall in price of each visit

2. the option to schedule visits during free time of clients/patients

3. the emergence of an airborne disease like covid-19

4. both a and b

5. both b and c

2. If patients were allowed to sue their HMO, we would expect

1. the demand curve for health care services provided by the HMO to shift to the left and the price of HMO-provided health care coverage to fall.

2. the supply curve for health care services provided by the HMO to shift to the left and the price of HMO-provided health care coverage to rise.

3. the supply curve for health care services provided by the HMO to shift to the right and the price of HMO-provided health care coverage to fall.

4. a and b

5. none of the above

3. If for a good/service like medical care income elasticity is greater than 1, then demand for medical care is income __________, and it is a __________ good

1. inelastic; inferior

2. elastic; normal

3. elastic; inferior

4. unit elastic; normal

5. inelastic; normal

Answer 1

1. The correct answer is option E. Both b and c.

Explanation:

Shift in demand is caused by change in factors other than price such as change in price of related goods, change in consumer's income, change in taste, nature and preference etc.

Leftward shift in demand curve for clinic visits for routine non-emergency check-ups means fall in demand for clinic visits due to factors other than price of clinic check-ups. Thus, option E is correct because :

(i) The option to schedule visits during free time of clients/patients will shift the demand curve leftwards as patients will visit clinics when they are free. This would reduce the demand for clinic visits as there would be change in preference of patients by scheduling their visit as per their choice and not all patients are free at same time.Thus, shifting demand curve to left.

(ii) The emergence of an airborne disease like covid-19 will shift demand curve for clinic visit to left as less patients will visit clinic due to pandemic. Thus, demand falls and shifts to left due to factor other than price.

Thus, option E is correct.

2. The correct answer is Option B. If patients were allowed to sue their HMO, we would expect the supply curve for health care services provided by the HMO to shift to the left and the price of HMO-provided health care coverage to rise.

Explanation:

If patients were allowed to sue their HMO, it would reduce the supply of medical organizations as they are to be forced into legalities as such supply curve for medical organizations shift leftwards due to change in factor other than price. But, it would increase demand for health care coverage as patients are provided with ability to sue HMO so increased demand will rise the health coverage price. Thus, option B is correct.

3. The correct answer is Option B. Elastic; normal

Explanation:

Income elasticity is the degree of responsiveness of demand of a good to the change in income of consumer.

Income elasticity of greater than 1 shows that demand for medical care is income elastic. It means proportionate change in demand is greater than change in income and the good is considered a normal good whose demand increases with the rise in consumer's income.

Thus, option B is correct.