ABSTRACT
This chapter focuses on welfare economics, the study of normative issues that bear on economics. It explains and describes the role of need and need-based distributions in the health economy. A solid background in these issues requires a study of the economics of efficiency, the departures of many health care markets from the competitive model, the role of equity concerns, and issues of social justice theory. A century ago, the economist Vilfredo Pareto defined the concept of efficiency most frequently used by economists today. The slope of the budget line represents the rate at which one can trade one good for another at market prices. Canadians and Europeans are using government interventions, although the success of the Patient Protection and Affordable Care Act (PPACA) in 2010 suggests that the United States may have moved in that direction, albeit with some substantial political opposition.
