29 Questions
What distinguishes needs from wants?
Needs are associated with clear negative outcomes if deficient, while wants are not.
What is demand according to the text?
The ability and desire to pay for goods and services.
What is the relationship described by the demand curve?
The inverse relationship between the price of a product and the quantity demanded.
In health demand, what does demand reflect?
The utilization of health care services to meet health needs.
What is reflected by a high demand according to the text?
Increased supply of wants by the for-profit sector and governments.
How is the quantity demanded defined?
The amount of a product people are willing to buy at a certain price.
What is the basic principle of the law of demand?
The higher the price, the lower the demand.
How does the law of supply differ from the law of demand?
The law of supply shows a positive relationship between price and quantity supplied.
What is the relationship between supply and demand in a market?
Supply and demand can be equal.
What happens when a market is at equilibrium?
The allocation of goods is at its most efficient and there is no tendency for the market price to change.
Why do producers supply more at a higher price?
To increase revenue.
What is the definition of market equilibrium?
When quantity supplied and quantity demanded are equal.
What is the primary focus of health economics?
Analyzing the production, distribution, and consumption of healthcare goods and services
What differentiates a 'need' from a 'want' in health economics?
A 'need' is a physiological or biological requirement, while a 'want' is a non-essential desire.
Which of the following best describes the role of the public sector in filling societal needs?
Filling 'needs' by providing essential services such as roads and schools
Which of the following is not a distinct topic covered within the scope of health economics?
The creation and distribution of wealth
Which of the following is a common example of a 'need' in health economics?
Basic medical services
What role does Maslow's hierarchy of needs play in health economics?
Maslow's hierarchy of needs is not relevant to health economics.
What is the definition of demand in the context of a marketplace?
The summation at each price of the quantity demanded by each individual
What occurs in a market when there is an increase in demand?
The demand curve shifts to the right
What causes a change in the quantity demanded?
A change in the price of the good
Which of the following is not a determinant of demand?
Market competition
How does a demand curve account for a change in demand?
A shift of the demand curve to the right indicates an increase in demand
What are the three main factors that influence health service utilization?
population health needs, their ability to pay, and availability of services
What is the Law of Demand?
A claim that the quantity demanded of a good falls when the price of the good rises, other things equal
What does a demand curve show?
The relationship between the price of a good and the quantity demanded
What happens to the quantity demanded when the price of a good increases, according to the Law of Demand?
It decreases
What is the difference between individual demand and market demand?
Individual demand is the demand of a single consumer, while market demand is the sum of all individual demands
What is the shape of the demand curve, according to the Law of Demand?
Downward sloping
Study Notes
Law of Demand
- States that, if all other factors remain equal, the higher the price of a good, the less people will demand that good
- The demand relationship curve illustrates the negative relationship between price and quantity demanded
Law of Supply
- Demonstrates the quantities that will be sold at a certain price
- The supply relationship shows an upward slope, meaning that the higher the price, the higher the quantity supplied
Supply and Demand Relationship
- When supply and demand are equal, the economy is said to be at equilibrium
- At equilibrium, the allocation of goods is at its most efficient because the amount of goods being supplied is exactly the same as the amount of goods being demanded
Equilibrium
- An equilibrium is the condition that exists when quantity supplied and quantity demanded are equal
- At equilibrium, there is no tendency for the market price to change
- Everyone (individuals or countries) is satisfied with the current economic condition
Needs and Wants
- Needs are distinguished from wants because a deficiency would cause a clear negative outcome, such as dysfunction or death
- Needs can be objective and physical (e.g., food) or subjective and psychological (e.g., the need for self-esteem)
Demand
- A schedule or curve that shows the various amounts of a product that consumers will buy at each of a series of possible prices during a specific period
- Refers to the ability and desire to pay for goods and services
- The quantity demanded is the amount of a product people are willing to buy at a certain price
Health Demand
- The desire and actual effort involved in attempting to bridge the gap between optimal health and ill health through the utilization of health care services
- Reflects the demand of all consumers in the marketplace for a particular good or service
Changes in Demand
- An increase in demand means that, at each and every price, more of the good is demanded
- A change in quantity demanded is not a change in demand; it is a movement along the demand curve
- A change in demand shifts the demand curve
Determinants of Demand
- Changes in consumer income
- Changes in prices of related goods
- Changes in consumer expectations
- Changes in the number or composition of consumers
- Changes in consumer tastes
Supply
- A schedule or curve showing the amounts of a product that firms are willing to make available for sale at each of a series of possible prices during a specific period
- The amount of a product or service that firms are willing to sell at alternative prices
Health Economics
- The scope of health economics involves distinct topics, including:
- What influences health (other than health care)
- What is health and what is its value
- The need for health care
- The demand for health care
- The supply of health care
- Micro-economic evaluation at treatment level
- Market equilibrium
- Planning, budgeting, and monitoring mechanisms
Test your understanding of the scope of health economics including topics like factors influencing health, the value of health, demand and supply of health care, micro-economic evaluation, market equilibrium, and planning mechanisms. Learn about the various aspects of health economics in this quiz.
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