Scope of Health Economics Quiz

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