Economics – Health Care Questions

1. The demand for health care is increasing for several reasons. One reason why the demand for health care is increasing is due to the overall increase in life expectancy of people in the UK, as people are living longer the population is increasing and therefore more people are dependent on the health care. Another reason why the demand for health care is on the rise is that people are getting richer and therefore wanting and undergoing more cosmetic surgery which is part of the health care. In addition to this, improvements to technology and the range of treatments available mean that more people are seeking a cure thus the demand for health care is increasing. Finally demand for health care is increasing as a result of higher birth rates and immigration which means a population increase. As more people are brought into the UK they all need health care whether it is private or the NHS however there is an increase in demand.

2. The market for health care clearly illustrates the concept of scarcity. Scarcity literally means that economic agents can only obtain a limited amount of resources at any moment in time; in this case the economic agents represent the NHS and the allocation of their resources e.g. doctors, treatments, etc. The want for health care is infinite as people are in constant demand for it in order to live; because if they are in pain or feeling ill they will automatically turn to the health care market. However the resources are limited as there is only a limited amount of doctors, treatments and appointments available to offer in contrast to the number of people in demand for them therefore this shows the concept of scarcity. The resources are scarce while the wants are infinite and consequently representing the basic economic problem.

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3. The production possibility curve in figure A is a curve because it illustrates the principle of increasing cost. As more of one product is produced: in this case healthcare the larger amounts of the other product must be given up. The curve shape of the production possibility frontier is due to the presumption that the  economy’s resources  are not well suited to the production of both goods. Economics constantly struggle to reach an optimal production capacity and due to scarcity it forces the economy to choose one choice ahead of another, the slope of the production possibility frontier will ...

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