Question

2. Critically discussion the statement, “Medial care is so special that normal economic forces do not apply.”

3. Discuss how gasoline prices might have both a positive and negative impact health outcomes.

4.Identify and discuss the available evidence on how increases in spending on medical care in recent years has had a beneficial effect on people’s health.

Answer 1

A) Medical care is something that doesn't fall into the convention of economic theory. This space often observes monopoly or duopoly kind of markets and entry of new players are often difficult. Law of diminishing marginal utility doesn't work on medical care and the law is one of the fundamental law in economics.

B) Gasoline prices impact a lot of sectors as gasoline is one important input in the process of production. If prices rises then production and transportation costs surge which result into higher medical costs which impact the patients purchasing power and if the prices go down essentially it will have a positive impact on the costs.

C) Increase in spending by big pharmaceutical players in research and development to identify and further optimize the existing drugs have improved the overall quality of medical services considerably. The only big cost these companies have in their books are research and development related as medicines need consistent development over time.