When referring to goods and services we must include the different aspects that health and care encompass. In this sense, we must consider that people are continuously buying goods or services, from which we expect to obtain a benefit or satisfy a need. These goods or services are obtained through a usually economic exchange, through which such good or service is obtained. In the economic context, wealth can be defined as the economic value of the goods and resources possessed by a person or a group of persons.
Associated with the concept of wealth we must consider the concept of income, which is the value of monetary and non-monetary resources obtained over time and as a consequence of the consumption-profit circle.
In addition, we must know the concept of utility within the framework of the economy. Utility is the benefit or satisfaction that individuals obtain from the purchase or acquisition of goods or services. Together with this concept, we have that of marginal utility, which is the benefit we obtain from the consumption or acquisition of one more unit of the good or service in question. Marginal utility refers to a concept of «extra» or «added», it is never a fixed value and depends on the preferences of the different people who consume the good or service in question. What is uniform is the fact that people tend to maximize total utility, that is, to try to get the most out of each good or service that is purchased.
Related to the applied economy and in direct relation to the costs of the goods and services that in turn influence the possibility of acquiring them, we find the concepts of supply and demand. Thus, supply must be considered as the amount of goods and services that the producers of these goods and services are willing to offer at a price and in a specific market. Demand, on the other hand, is the quantity of goods and services that consumers wish to acquire or consume in a specific market and under specific circumstances. Under normal market conditions, when supply rises and demand falls, the price usually falls. When supply goes down and demand goes up, the price usually goes up. This always happens under conditions that in economic terms are called normality.
Once the concepts of supply and demand have been presented, we need to know the term demand elasticity. The elasticity of demand measures the change that occurs in the quantities of a good or service in response to changes in the factors that determine it, i.e., the elasticity of demand tells us how the demand for a good or service decreases in response to a decrease in its price. The factors that influence demand are:
- The price of the good or service.
- The price of substitute or complementary goods.
- The income of consumers.
- The preference of the consumers.
On the other hand, we find the elasticity of supply, which measures the change in the quantities offered in the face of changes in the factors that determine it.
Next, we will address the concept of economy of scale. This concept refers to how production costs change when production increases. That is, an «extra» income is produced for each additional unit produced. This is true up to a certain level of production of the good or service, after which this concept ceases to be fulfilled.
Next we expose the concept of incentive as: the stimuli that are made to the consumers to acquire a good or service. These incentives can be used not only to increase consumption, but can also be used to consume better, more safely, etc.
Along with these concepts, there is the concept of market efficiency. The market for a good or service is said to be efficient when it reflects all the information related to it. It is very normal to see how in conditions of instability there are imbalances in the efficiency of the market. In this way, market failure appears, a concept that responds to the situation in which the market is not able to allocate resources efficiently, as a consequence of lack of information, non-competitive markets, externalities or public goods. The case of public goods is the case of a market in which an agency, usually a government, sets the way in which this good or service should be distributed.