Module 4 - Megan Carter ECO 201 Principles of...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Megan Carter ECO 201 – Principles of Microeconomics Dr. Roberson April 27, 2010 Aplia Extra Credit Chapter One 1. The structure of the drug industry has a large bearing on the types of errors that drug firms are likely to make. A drug industry made up of numerous highly competitive firms would definitely be more likely to introduce unsafe drugs than an industry consisting of a few large firms. A drug firm in a drug industry with numerous highly competitive firms needs to get drugs out before the other firms in order to turn more of a profit, and because there are so many competitive firms in the industry there is more of a chance of another firm releasing a drug before the first firm. Where as in an industry consisting of a few large firms it is less likely that another firm will release a drug before another firm that is researching the same kind of drug. 2. Type II errors could be reduced by comparing the FDA approval process to the drug- approval processes in other countries where there are possibly less people dying of a disease in which a drug that has been released in that country is helping people, and in the U.S. the drug hasn’t been passed and there are more people dying. Of course, it is almost impossible to even do this because (as the book states) how are you to tell who is dying due to a drug not being released? Ideas from other countries should be implemented in order to find the right amount of testing where everyone is happy, at equilibrium. 3. The problem with depending on people to actually read everything put out by the FDA about every single drug created every year is that is realistically will not happen. Physicians will not be making decisions on whom to give drugs to based on economics, because they don’t get a profit cut from the companies, but based on possibly their heart and not the facts. Even if a drug is deadly they may try it just to make sure they try everything possible. Someone who does not know the patients needs to make decisions on whether or not they are available, otherwise decisions will be made that are possible not what is actually best for the patient. Of course, there are some physicians that would take this for granted and actually help people, but the majority Carter 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
would be hurting more than helping without even realizing it. The advantage would be that these drug firms would be making more money in the short run at least, because more drugs would be sold, although if there are deaths caused by these drugs then the profit in the long run could be lower. 4.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 08/31/2011 for the course GEO 211 taught by Professor Maingi during the Spring '10 term at Miami University.

Page1 / 5

Module 4 - Megan Carter ECO 201 Principles of...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online