Leonard Fleck, a philosophy professor at Michigan State University, has written: When it comes to health care in America, we have limited resources for unlimited health care needs. We want everything contemporary medical technology can offer that will improve the length or quality of our lives as we age. But as presently healthy taxpayers, we want costs controlled. Why is it necessary for all economic systems to limit services such as health care? How does a market system prevent people from getting as many goods and services as they want?

Short Answer

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Economic systems need to limit services like healthcare because resources are limited but our needs are virtually unlimited. This introduces the economic principles of scarcity and trade-offs. The market system prevents people from consuming unrestrained amounts by controlling demand and supply through price. This implicitly rations goods and services limiting the quantity each individual can buy.

Step by step solution

01

Understanding the Limitation of Services

Economic systems limit services such as health care because resources are finite. This concept is at the heart of the 'scarcity principle' in economics which states there's a limited amount of resources to fulfill unlimited needs and wants. As health care is one of these resources, it's necessary to allocate it in a way to serve the maximum amount of people. This also introduces another important economic concept known as a 'trade-off', which means prioritizing one service over another due to these limitations.
02

Explaining the Role of the Market System

A market system puts consumers and producers into competition. Consumers compete with each other for the goods or services while suppliers compete to provide these goods or services. The supply and demand principle in a market economy regulates this. Producers set the price based on the cost and the demand. If the price is too high, demand drops. However, when the cost is too low, it could exceed the supply, causing scarcity. Hence, within a market system, price serves as a 'rationing' mechanism that limits the quantity of goods or services each person can buy, hence preventing people from getting as many goods or services as they want.
03

Analyzing the Balance Needed

Our wants will always outpace our ability to satisfy them. This imbalance between resources and desires is a fundamental economic problem and is not unique to the market system. It also extends to systems where resources are allocated differently, such as national health services. In such systems, care might be rationed differently, like through waiting lists or eligibility criteria within governmental policy decisions. Thus, it's important to understand the need for balance and fairness in these systems as no one system can serve all people equally with their healthcare needs.

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