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Econ 3 AQA A2 Economics - Need help on a 10 mark question. Watch

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    Can anyone help me on a question like this, quite an unfamiliar question as I've never answered anything like it before. It was on the June 2013 paper, Any help is appreciated

    Distinguish between price elasticity of demand and income elasticity of demand,
    and analyse why, when people have medical insurance, the price elasticity of
    demand for medical treatment might be ‘very low’ while the income elasticity of
    demand is ‘likely to be high’
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    I'd honestly just not do that question.
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    I remember doing this question two weeks ago. Slightly tricky, but theres a few things i remember which i picked out.

    Low = Inelastic, High = Elastic

    PED is inelastic for health treatment because obviously if you have just had a dog bite your face off, you want the operation done asap regardless of price. Hence it follows the suit of inelasticity as if the doctors bumped up the prices, you won't give a damn since you just want that operation. Also you should perhaps incorporate the unpredictability of such accident. I believe for insurance, the company covers the costs for the treatment.

    YED is elastic for medical treatment, perhaps because as people become richer, they suffer from less informational failure meaning people become more aware of medical treatments which are available to them for a problem which they maybe kind of ignored. Also you can talk about how as peoples income rises, luxury services (treatments) like boob jobs or those ab plates become more realistic for the individual, as they have more disposable income. This would follow suit of elastic goods as an increase in income will likely lead to greater proportion in demand for the good.
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    (Original post by Abdul-Karim)
    I'd honestly just not do that question.
    Yeah it's kind of a weird one.
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    (Original post by Jkizer)
    I remember doing this question two weeks ago. Slightly tricky, but theres a few things i remember which i picked out.

    Low = Inelastic, High = Elastic

    PED is inelastic for health treatment because obviously if you have just had a dog bite your face off, you want the operation done asap regardless of price. Hence it follows the suit of inelasticity as if the doctors bumped up the prices, you won't give a damn since you just want that operation. Also you should perhaps incorporate the unpredictability of such accident. I believe for insurance, the company covers the costs for the treatment.

    YED is elastic for medical treatment, perhaps because as people become richer, they suffer from less informational failure meaning people become more aware of medical treatments which are available to them for a problem which they maybe kind of ignored. Also you can talk about how as peoples income rises, luxury services (treatments) like boob jobs or those ab plates become more realistic for the individual, as they have more disposable income. This would follow suit of elastic goods as an increase in income will likely lead to greater proportion in demand for the good.

    Cheers for your help, I understand it know to some extent
    Truth be told if a question like this came up in the exam, I wouldn't touch it with a bargepole.
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    (Original post by Lord Fifa)
    Cheers for your help, I understand it know to some extent
    Truth be told if a question like this came up in the exam, I wouldn't touch it with a bargepole.
    Same haha. I remember doing this paper as a mock and i couldnt even remember all the YED/PED stuff and definitions.

    To be honest i think the 25 marker is a lot neater for this question than the water one.
 
 
 
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