Economics Flashcards
1
Q
What is economics?
A
study of how limited resources can best be used to fulfill unlimited human wants
2
Q
Why worry about economics?
A
- clinical trials & traditional scientific research describe the potential of various treatments or control programs to affect the biological aspects of disease
- but, do the costs incurred by the treatment or control program justify the gains or returns?
3
Q
what is the purpose of economics?
A
- economics is a tool which utilizes both art & science
- can be used to: (evaluate the past; quantify/describe the present; predict or plan for the future (least effective))
- it does none of these perfectly!
4
Q
What are economic projections?
A
- economic projections are often imprecise & imperfect
- but we need to understand a basic economic evaluation to help us & our clients plan for the future
- economic analyses utilize “MODELS” to approximate reality
- often need simplifying assumptions
- are the assumptions realistic enough that the model is valid?
- have we included all of the important variables or factors?
5
Q
What effect does biological systems being “OPEN” systems have?
A
- they involve many variables (often unknown) that can effect the outcome of any plan
- degree of precision is often poor
- however, even w/ imperfect info the order of magnitude can be helpful!
6
Q
What is profit?
A
Profit = revenue - expenses
- challenge of an economic analysis is to determine the revenues & expenses
7
Q
what are motivations?
A
- profit
- easy to focus on profit as an end pt
- understandable
- quantifiable units ($)
- can compare several different aspects, enterprises, or industries
8
Q
what about the fact that not everyone is motivated solely by profit?
A
- economists realized this and came up w/ concept of UTILITY
- everyone has a concept of what is “good” for us
- abstract concept & not as easily measured as $ (security, peace, fun, lack of change, fulfillment)
- reminds us that people dont respond only to monetary motivators
- important in companion & human med
9
Q
How does profit influence food animal producers?
A
- profit is not necessarily a goal but a constraint
- they pay attention to it & it’s necessary to survive
- clients (& vets) often do financially stupid things b/c something else is more important to them
- however, much of what is done is done to increase profits
- often translated into increased production
- note: production is only half the profit eqn
10
Q
what is risk?
A
- another aspect of producer behaviour
- 2 basic aspects of risk
- probability of harm
- magnitude of bad outcome (severity of impact)
11
Q
profit vs risk?
A
- vx programs may not be profitable in the long term
- however, they do minimize the chance of the “catastrophic outcome”
- we may choose to minimize risk @ the expense of profit
12
Q
Have the interventions being compared been shown to be clinically effective?
A
- is there a valid clinical trial (or trials) behind the economic analysis?
- can we trust the “biological” effectiveness that is being assumed?
- chance, bias, randomization, blinding
13
Q
Whose viewpoints are costs and benefits being considered from?
A
- gov/industry?
- farmer?
- vet?
- public health (ex: selective slaughter to control tuberculosis)
- there is no right perspective, but it should be stated clearly
14
Q
Was the “time value” of money considered?
A
- money that we have now is worth more to us than money we will receive later
- economic analyses that have a long “time horizon” need to take this into account
15
Q
what is a time horizon?
A
- time scale/limit w/in which an economic analysis is made
- rarely “forever”
- one of the most important assumptions of any economic analysis
- the longer the horizon, the more difficult the analysis
“time value of money” may need to be taken into account
