Pear Assignment #1
In a recent article published by the Toronto Star, attention is drawn to the current strain on the healthcare system and how it will increase in the future. Political leaders are urged to take action before the situation becomes worse. Experts anticipate the number of senior citizens to double in the coming years as a result of the baby boom. This will place an even bigger strain on the already stretched healthcare budget and may send this sector into crisis. An economic approach aids in understanding this complex social problem and suggests potential solutions as well.
The government provides an excellent example of scarcity at work. The political leaders in power decide how the budget should be spent on behalf of all Canadians …show more content…
That is to say, there is an opportunity cost associated with every decision made by the government. One example, mentioned in Cocktail Party Economics, is that supplying a gun to a soldier in the army means that money will not be spent on recreational activities in schools (p16). In this example, the decision to fund other areas over healthcare means that there will be fewer resources available to this sector. As for the citizens who receive the healthcare, they too must pay an opportunity cost. Usually, the opportunity cost comes in the form of wait times at hospitals and doctor’s offices. Although we are lucky enough to enjoy many free health services, there are a few things not covered by the government due to spending elsewhere, resulting in some out-of- pocket expenses for citizens. A general rule is that the scarcer …show more content…
Firstly, they can move along the supply curve by allocating more resources to the healthcare sector. This can be looked at as a change in price (p70) because the opportunity costs for citizens will go down in the form of less wait times and out-of-pocket expenses. However, if more resources are allocated to healthcare, there will be a trade off – an opportunity cost. This could mean less money towards public education and welfare initiatives, which will certainly only create more problems. A more feasible solution would be to shift the supply curve. The article mentions that other countries have superior healthcare and are able to spend a lower amount of their GDP than Canada. This means that other countries are better at allocating their resources. In other words, these countries are more productive and can produce greater outputs with the same or less inputs (p38) than Canada can. The Canadian supply curve can be shifted by innovations that use resources more wisely to produce a greater output with the same input, thus shifting its supply curve to the right
In a recent article published by the Toronto Star, attention is drawn to the current strain on the healthcare system and how it will increase in the future. Political leaders are urged to take action before the situation becomes worse. Experts anticipate the number of senior citizens to double in the coming years as a result of the baby boom. This will place an even bigger strain on the already stretched healthcare budget and may send this sector into crisis. An economic approach aids in understanding this complex social problem and suggests potential solutions as well.
The government provides an excellent example of scarcity at work. The political leaders in power decide how the budget should be spent on behalf of all Canadians …show more content…
That is to say, there is an opportunity cost associated with every decision made by the government. One example, mentioned in Cocktail Party Economics, is that supplying a gun to a soldier in the army means that money will not be spent on recreational activities in schools (p16). In this example, the decision to fund other areas over healthcare means that there will be fewer resources available to this sector. As for the citizens who receive the healthcare, they too must pay an opportunity cost. Usually, the opportunity cost comes in the form of wait times at hospitals and doctor’s offices. Although we are lucky enough to enjoy many free health services, there are a few things not covered by the government due to spending elsewhere, resulting in some out-of- pocket expenses for citizens. A general rule is that the scarcer …show more content…
Firstly, they can move along the supply curve by allocating more resources to the healthcare sector. This can be looked at as a change in price (p70) because the opportunity costs for citizens will go down in the form of less wait times and out-of-pocket expenses. However, if more resources are allocated to healthcare, there will be a trade off – an opportunity cost. This could mean less money towards public education and welfare initiatives, which will certainly only create more problems. A more feasible solution would be to shift the supply curve. The article mentions that other countries have superior healthcare and are able to spend a lower amount of their GDP than Canada. This means that other countries are better at allocating their resources. In other words, these countries are more productive and can produce greater outputs with the same or less inputs (p38) than Canada can. The Canadian supply curve can be shifted by innovations that use resources more wisely to produce a greater output with the same input, thus shifting its supply curve to the right