Introduction (L1)

Question 1

What are the three types of actors in health econ?

Answer 1

1. consumers (ex. patients, people buying health insurance)
2. Producers (ex. doctors, insurance companies)
3. Government

Question 2

What are the three central questions of microeconomics?

Answer 2

1. What goods and services get produced?
2. How are they produced?
3. Who gets what is produced?

Question 3

What are the features of economic analysis?

Answer 3

1. Scarcity of resources
2. Rational decision making
3. Marginal analysis
4. Use of models

Question 4

Opportunity cost

Answer 4

cost of the highest valued alternative one gives up at the macroeconomic (policy) or microeconomic (individual) level

Question 5

homo-economicus

Answer 5

a fictional creature that uses available information to make the choice that makes them better off, used to discuss assumption of rational decision making

Question 6

marginal analysis

Answer 6

people trade off small benefits for small costs to make a decision (incremental units of marginal costs and benefits)

Question 7

Unique aspects of market for health goods and services

Answer 7

• presence and extent of uncertainty
• prominence of insurance
• prevalence of externailities / contagiousness (i.e. other people’s behaviors affect your health)
• information asymmetry
• moral concerns
• psychology and systematic deviations from “rationality”

Question 8

externalities (in health and how to solve)

Answer 8

other people’s health decisions affect you

undermine efficient function of markets and often require government intervention

Question 9

normative questions

Answer 9

how things should be

Question 10

positive questions

Answer 10

how things are

Question 11

theoretical economics

Answer 11

process of building simplified models of behavior

Question 12

empirical economics

Answer 12

process of testing models