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Income Elasticity
During recent years, the president and Congress have complained about skyrocketing public and private expenditures for Medicare and Medicaid services. At the same time, the demand for privately financed medical care has also increased significantly.
A. Use the concept of the income elasticity of demand to explain why the demand for medical services has grown over time.
B. Is it surprising that the share of national income devoted to medical services in the United States is greater than the share of national income devoted to medical care in less prosperous countries around the world?
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Participating up to an additional
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