-->imagine if ration by height, nothing gained
Making things "law" is dangerous, forces someone to provide a service
ex: 64 yr breast cancer survivor, would have to wait 5 months to see doc about her back, but the visit is free
BUT she can pay to see a doctor sooner
-A cyst would be covered by nat'l health care, but she was denied because she could afford the sooner visit
-People complained that she used the price system to jump the line
Consider: some people do need medical care more desperately
-Eng doctor-->not incentivised to do more surgeries or to do the hard procedures
The beauty of the market system
1) don't have people determine if "needy" or not
2) Will not waste suppy
-NO vaccine police to solve; production/consumption solved by price system
ex: Water Ban
-Don't run water, take dog swimming, don't..
-shortages persist, persuasion doesn't work (sadly, proof is in the cheating on our test)
-little less becomes a lot less
-expect price to rise, buy more now and put more pressure
-people don't realize the full cost of water use
Prices Force:
-cheap, use more $$ give up least valued uses of water
-Doesn't require force from police
2) Consider value others place on water
-If price jumps to $10/gal, says someone out there reallly wants it
-->make decision not to buy the water
Price gives chance for people to gain from transaction
-Price water & it rises, incentivises producers to make more
-entrepreneurs find to ways to produce water
-w/out price, not enough water
Allocated wealth, right people produce/consume
Why kidney transplants 4?
-lack of specialization, kidneys buried
-people dying from kidney failure
Obj: legalize kid. sales
Would unethical methods increase because of chance to make $?
Imagine, ban sale of kidneys
-->profits HUGE on black markets, marginal value highter
People thing of healthcare as a sep. good
-Scarce, how distribute to society?
What should determine who gets health service?
-w/ burritos, no objection
--> those value, get them, why different in health care?
-No one argues we should all eat same, wear same, live same
Founders of Eng. health care system wanted ALL equal, rich and poor alike
BUT inequality greater today
1)Impossible to make healthcare indep. of income, occupation, education
2) Even if possible, is it always worth it?
3) Why do so many people talk about it?
Consider: some heart surgeons better than others
-->depending where you go, some get better care than others
Imagine if line for best surgeon is across the country
-not everyone can afford the plane ticket to get there, the hotel etc
"Free Education"
-Must be able to buy home in that area, get to work from that house
=>therefore, access to education is not equally distributed
Make choices by flipping a coin?
90 yr old lady vs 20 yr old student, who gets the new liver?
-yes, veil of ignorance;
Imagine world without money
Guitar maker, need materials to build and stuff to live
-money changes the nature of the transaction
Guitar maker wants a toothbrush, have to go around and find someone who makes toothbrushes
Does that producer want to exchange for a guitar?
-->Bartering takes time, waste chances to make more guitars or toothbrushes
1)Double Coincidence of Wants
2) Divisible: in barter world, have to divide stuff
-ticket=$200, guitar $2,000, give 1/10 of a guitar?
--inconvenient, hard to divide,
imagine paying for car with guitars, costs 100s of guitars
-->$ allows us to exchange more easily
why use price=assign monetary value
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