Question

Explain, in words and functional forms, the relationship between the consumption of goods and services, health, and utility and the relationship between health care services and health. Explain how the latter relationship is dependent on the disease in question.

Answer 1

In today's scenario health sector is emerging as an area which is growing very fast.For explaining the relationship between the consumption of goods and services, health, and utility and the relationship between health care services and health we have taken as assumption that the utility in the helth sector can be derived from the demand of the health care comes out of the health.

The consumption of goods and services can be treated as the purchase of health care produts.There are two crucial factors in determining the demand of the health care services, there are the time of the patient which is to be treated and the price attached with the fulfilling of that service.These two factors play a very crusial role in valuation of the services as every thing in economics is related with money. The factors of demand and supply also depeneds on a major factor of price.As the theory of demand and supply says that the decrease in price increases the consumption of goods and services and increase in the price will decline supply.This is the universal law of demand and supply.

Now if we apply this law in the case mentioned then we will find that the person who is getting treated will surely cansider that product which will cost him less but doen not hampers the health conditions.Also the time of the patient plays a very crucial role because we cannot take chance with the health of the patient..