Question

Suppose that a global health pandemic, known as “new-virus”, results in a dramatic increase in the demand for medical equipment and medically trained personnel. The rapidity of this increase far outstrips the ability of supplies of medical equipment and medically trained personnel to respond in the short-run. Now, Analyse the short-run impact of this shock on the optimal choice of health status, health care, and the composite “all other consumption” commodity in the Wagstaff model. (Interpret health status in this question to be separate of any direct health impacts of “new-virus”. In other words, assume, rather unrealistically, that there are no co-morbidities between “new-virus” and other diseases. Similarly, interpret health care consumption as excluding any health care consumption directly resulting from the treatment of “new-virus”.

Answer 1