Health Economics And Policy International Edition 4th Edition By James W. Henderson – Test Bank
Chapter 2: Using Economics to Study Health Care Issues
This chapter introduces the basic economics model of supply and demand and examines its use in the study of health care issues. A discussion of the principles of optimizing behavior sets the stage for the development of the model of demand and supply. A discussion of the theory of the firm follows, contrasting perfect and imperfect competition. Supply- and demand-side imperfections are also discussed.
Chapter Outline
- The relevance of economics in health care
- Critical assumptions in economics
- The scientific method
- Model building
- Problem solving
- Marginal analysis
- Economic optimization
- Demand and supply
- The law of demand
- Price elasticity of demand
- The law of supply
- Equilibrium
- The competitive model
- Theory of firm behavior
- Price Ceilings and Price Floors
- The Impact of an Excise Tax
- Welfare implications
- a) Consumer surplus
- b) Producer surplus
- Imperfect competition
- Supply-side imperfections
- Demand-side imperfections
- Summary and conclusions
Profile: Kenneth J. Arrow
| Issues in Medical Care Delivery | Back-of-the-Envelope |
|
|
|
|
|
|
|
Chapter Objectives
- Explain the use of economics as a framework for studying health care issues.
- Understand the limits of economics in explaining behavior in medical care markets.
- Recognize the importance of incentives in explaining individual behavior.
- Examine the basic economic model of demand and supply, including the concepts of equilibrium and elasticity.
- Understand and apply the model of firm behavior in medical markets.
