A doctor and an economist have the following
conversation:
Doctor: There is no waste in health care. All of care I
provide my patients is valuable. Every bit improves
health.
Economist: That last little bit of care you provide
costs far more than it is worth. It’s a waste of
resources. You’re reducing, not increasing, welfare.
Doctor: Reducing welfare? Ridiculous! My job is to
benefit patients and the public. That’s what I do.
Economist: Benefiting patients and the public? Don’t
be so sure! My job is to point out where we can
make better use resources. That’s what I do.
What’s this argument about? And who is right? It’s
about two different views of “welfare” and both the
doctor and the economist are right (or could be). It
all can be explained in terms of marginal benefit
and marginal cost.
Which of the two views do you agree with?
Culled from: www.pstlao.