In: Economics
1) Explain why the health care system is running out of medical supplies (beds, masks, ventilators,) during the pandemic of COVID-19 based on some of these economic terms:
- Public goods
- Free rider problems
- Common pool resources
- Management/ collective actions
- Non-market failure
Answer) We have to consider two important things here,first is that it is a pandemic situation and second it is not limited to one place,when something like this happens governments or hospitals are not immediately prepared for such inflow of patients as such pandemics are not common,at times most of the governments are stuck at a decision point where they look to minimize costs,import at a lower cost and make sure these things don't run out which is a sign of non-market failure as beyond market of demand and supply there are other decisions and forces which are disturbing the natural flow and requirements of market,second point is that in normal times these would be not so much demanded or will be need based alongside based on one 's paying capacity which limits use but in times like these,governments have to subsidize a lot of these facilities which make them limited public goods which are bound to run out after a period,third point I would like to mention is how a lot of individuals and government also went to utilize these facilities when they showed mild symptoms which could have been avoided had collective effort been there or how people stocked on masks and pther health care essientiels despite having enough for some time,this can be explained by theory of collective action where individuals act in their self interest and in process group suffers,what we can see from all this explanation is that something which was not anticipated was followed by panic and self interest accompanied by non market forces which lead to huge difference between demand and supply of these supplies and creating a shortage in the market for some time.
Answer is complete.Thank you!