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Question
The chapter references a 2002 RAND Corporation study that determined -0.17 as the average price elasticity coefficient for health care. What can generally be said about this figure?
a. As health care increases in price, it results in nearly a one-for-one reduction in consumption.
b. As health care increases in price, it results in only a very minor reduction in consumption.
c. As health care decreases in price, it results in nearly a one-for-one increase in consumption.
d. As health care decreases in price, it results in a large increase in consumption.
e. Since the coefficient is negative, it means there is no causal relationship between price and consumption.
Answer
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