Part one of term paper
The is derived from our demand for good health. Michael Grossman was the first to do econometric research on this topic. “Grossman’s work established two approaches for consideration. In the first, medical care is viewed as an input in the production function for health, and in the second, as an output produced by medical care provide ...

Part two of term paper
... problem. We are faced with the problem of diminishing marginal returns for health. At a certain point, we can only produce so much health. The question we need to ask ourselves is what is the optimal budget for medical care? This is a question that can not be easily answered due to our changing . If we get sick we demand more medical attention. Or, if we choose to live more dangerously this will also increase the demand. Therefore, who should pay for these increased costs for medical insuran ...