ECON 379 Study Guide - Midterm Guide: Diminishing Returns, Consumer Choice, Marginal Utility
30 Apr 2017
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Document Summary
The total contribution of health care inputs is the sum of the marginal products of each of the n units. However, the law of diminishing marginal returns states that the extra marginal benefit of each additional n unit of health care decreases as there are more units of health input. Flat of the curve is the maximum health benefit that can be achieved with health inputs (ie medicine). Health is a black box in which health inputs (physicians, medicine) and social determinants (income) go in. What comes out of the box outside the box are the health outcomes (health measures). X = health determinants, income, education, age, gender, occupation, access to health services. The demand for health and medical services is derived from the demand for health itself. It treats health as a good produced like any other using market inputs and individual"s time. The individual is both the consumer and producer for health.
