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DISCUSSION TOPIC:
1. How does cost benefit analysis differ from cost-effectiveness analysis?
2. Why has cost-effectiveness analysis become the method of choice for health economists around the world?
Please must include references.
Questions:
1. What is market failure? What are the major reasons that a free, unregulated market in medical care might not be optimal?
2. Proponents of a government-run health care system argue that the market does not work well in the medical care industry. What evidence do they use to support this claim?
3. Explain how market failure can be used to justify government intervention in medical care markets.
4. How do price controls affect the workings of a perfectly competitive market? Use a supply-demand diagram as part of your answer.
5. What assumptions of the perfectly competitive marketplace are violated in medical markets? How does each affect equilibrium price and quantity?
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