Skeleton Notes #2 Flashcards
models and individuals goals and contraints
the grossman model
the goal of the individual is:
to maximize utility
happiness, well-being
utility
how do we maxmize utility
increasing h and z
h represents _______. we buy ______________ to increase h.
health
m goods/services
z represents ________. we buy ________ to increase z.
other goods/services
j goods/services
although both h and z increase utility they show _____________
diminishing marginal activity
what is an example of having diminishing marginal utility in h goods
overuse of vitamins, medicines, antibiotics
the production of health (and z) requires two things
time
income/resources
formula for total time:
t^s + t^w + t^h + t^z
income equals:
wage x time working
the less time i spend ___- the more time i can _____ and thus make more _____ and thus invest in things that improve my ____ which should help lower the time i spend _____-
sick
work
income
health
sick
draw a time tradeoff graph (people have different preferences and constraints) in which person 1 is sick a lot and person 2 is healthy. they both make 10 an hour
-
draw a z-h production possibility frontier (ppf) of a low income country vs a high income
-
for the time tradeoff model, increases ___ allows for more time on ____ and ____ which allows for higher _____
health
work
z
utility
Becker and Grossman applied tools of _____ to human decisions on education and health
finance
health acts as three types of goods in the grossman model
health is both a consumption good, as we gain utility from it
health is a production good, and increases our ability to earn higher incomes
health is a form of wealth capitol, investments yield returns
in order to maximize lifetime utility, we can increase the stock of health capitol by ______
adding to it, with flows such as exercise and healthy behaviors
we can lose the stock of capital by _____
not properly taking care of it;
smoking, eating doritos, unhealthy behavior
like other forms of capital health can ____ or be _____ for example:
depriciate
i.e aging
the MCH is made up of two things:
opportunity costs of spending time/resources in health activities
depreciation rate
what are some examples of MCH that deteriorate health. how would these move the MCH line?
dementia, lead in the water, pollution, depression, stress, aging.
the MCH line would shift UP
why is the MBH negative?
the diminishing marginal utility of health and the diminish marginal product of time spent on health-inducing activities
lack of ____ lowers MBH because _____. this would lead the MCH line to shift ____.
access
it takes more time/resouces to use them
up
