Basic Economics - Part 1

What is a commodity in economic terms?

A commodity is a marketable item, like goods (e.g., medications) or services (e.g., pharmacy consultations), produced to satisfy consumer needs.

Define utility in the context of economics.

Utility is the satisfaction or benefit derived from consuming a good or service.

What is marginal utility?

Marginal utility is the additional satisfaction gained from consuming one more unit of a good or service, typically decreasing as consumption increases.

How is demand defined in economics?

Demand is the consumer's willingness and ability to purchase a product at various prices, generally inversely related to price.

Explain the concept of supply.

Supply is the quantity of a product that producers are willing to provide at different prices, often increasing with higher prices.

What is equilibrium price?

Equilibrium price is the price at which the quantity demanded by consumers equals the quantity supplied by producers.

Describe the price system.

The price system is a market mechanism where prices adjust based on supply and demand, guiding resource allocation.

What is price discrimination?

Price discrimination is the practice of charging different prices to different consumer groups based on their willingness or ability to pay.

Define elasticity of demand.

Elasticity of demand measures how much the quantity demanded changes in response to a change in price.

What does the law of demand state?

The law of demand states that the quantity demanded of a good decreases as its price increases, and vice versa.

What is the law of supply?

The law of supply indicates that as the price of a product rises, producers are willing to supply more of it.

What is market equilibrium?

Market equilibrium is the point where the supply and demand curves intersect, setting the market price for a good or service.

List factors that can affect demand.

Factors affecting demand include prices of related goods, consumer income, the number of consumers, preferences, and future expectations.

Name some factors that can affect supply.

Factors affecting supply include production costs, technological advances, government policies, and the availability of resources.

How is price discrimination applied in healthcare?

Price discrimination in healthcare may involve different pricing based on insurance, income levels, or bulk purchasing discounts.

How is marginal utility relevant in healthcare?

Marginal utility helps guide treatment decisions, ensuring that additional treatments provide meaningful health benefits for patients.

Why is understanding supply and demand important in pharmacy practice?

Understanding supply and demand helps pharmacies manage inventory, set prices, and allocate resources effectively.

How does elasticity of demand vary in healthcare?

In healthcare, demand for essential services is often inelastic (less responsive to price changes), while elective services are more elastic.