Economic Terms and Healthcare Essay

897 WordsJul 13, 20134 Pages
Economic Terms and Healthcare Celletta Tate HCS/440 Economics: The Financing of Healthcare 6/24/13 Michele Burka Economics have been around for many years and provide one very useful lens to aid in the understanding of how and why health systems change and an explanation of the relative merits of different policy approaches (The Economic Evolution of American Health Care: From Marcus Welby to Managed Care, 2009). Economics is the science behind production, consumption, and distribution of goods and services, or the material welfare of humankind. Part of economics that deals with the main fields of the social science is microeconomics. Microeconomics concerns the behavior of individual firms, industries, and consumers. This part of economics is seen as a smaller part that also studies how decisions are made to distribute limited resources. Often called “the bottom-up view of the economy” or “how people deal with time, money, and resources,” microeconomics has many different goals (Microeconomics, 2013). Of these goals, microeconomics tries to analyze market mechanisms that create relative prices of goods and services and distribution of limited resources among many alternative uses. Analyzing market failures helps to determine where these markets fail to produce efficient results along with describing the conditions needed for perfect competition. A bigger part of the economics world is macroeconomics. This part deals particularly with the broad and general features of an economy and involves the relationship between the investments and income of a country as a whole (University of Phoenix, 2010). In other words, macroeconomics has been used to analyze the best way to influence the policy goals of the government like price stability, full employment, economic growth, and the attainment of a sustainable balance of payments (Microeconomics,
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