This week we have a highly controversial topic that has been debated from many points of views: politics, ethics, religions, and so on. Or you might think this is a highly personal decision in which economics could not play a role. Even in something as personal as abortion or liver transplant, prices and incomes seem to matter. A study regarding abortions shows that where and when the price of an abortion is higher, the number of abortions is lower; and this is consistent with the law of demand.
a) If the price elasticity of demand for abortions is around 1 (or unit elastic), what does this mean? Explain by giving an example.
b) If the income elasticity of demand for abortions is around 0.5, what does this mean? Is abortion considered as a normal good or inferior good? Is it a necessity good or a luxury good?
c) Take another delicate procedure: liver transplants. Would you think the demand for liver transplants is more or less price-elastic than the demand for abortions? Explain your reasoning
1. Post your answer (400-500 words) to the posted DQ responding to the matter asked, instead of repeating the question or not attending to the question. Substantive answers include making comments using concepts found in the assigned reading materials or offering examples from your experience. Hence merely providing a brief “yes, I agree” or “no, I do not agree” postings are not adequate posts
2. Write in correct grammar; any errors will translate to a deduction in points.
3. Check for the spelling; any errors will deduct points.
4. Your responses must be substantive that include your own thoughts, supported with research (at least two external sources other than textbook, and you must quote these sources)
5. Offer a creative solutions in addition to the obvious socio-economic impacts of each topic, such as environment, politic, or other issues.
6. Offer a future recommendation or alternative options for the future with regard to the topic in question.