Economics

Market demand in Question 3
Price per unit 20 19 18 17 16 15 14 13 12 11
Demand 10 11 12 13 14 15 16 17 18 19
Total revenue 200 209 216 221 224 225 224 221 216 209
Marginal revenue 9 7 5 3 1 -1 -3 -5 -7
Question 4
Check the graph attached
Check the graph attached

Marginal Cost MC  Marginal Revenue MR at the point where the graph lines of MC and MR intersect. In this case, marginal revenue and marginal cost intersect at an output of 12 units per day. (Indicated on the graph).

A monopolist will produce at the rate of output where MRMC. This is because at that intersection, there are maximized profits. The demand curve indicates the maximum price that consumers are willing to pay for that particular output rate. This demand curve is similar to the price curve that consumers are willing to pay. Therefore, an extension from the intersection of the MR and MC curves to the demand curve is the price that the monopolist will charge for that profit maximizing rate of output. In this case,  18. Since the monopolist is the only producer in the market, he does not have to charge the price that is best for the consumer. He thus sets a price that maximizes profits for him.

In a perfectly competitive market, there are many producers in the industry and in order to survive in the industry, producers are forced to conform to the demands and wishes of the consumers. Therefore, although profits are maximized at the point where the MC and MR curves intersect, the demand of the consumers forces them to reduce their prices to a price that consumers are willing to pay. Therefore, instead of charging the price at the MC and MR intersection, the price at the intersection of the MC and Demand price curve is charged. This leads to higher production but less profit. In this case, the prevailing price will be  15. (Indicated at the intersection of the MC curve and the demand price curve)

An extension of this intersection to the level of production axis determines the level of output production. In this case, production is 15 units per day. (Indicated on the graph).

Question 5
Units demanded          Price per unit     Total Revenue Marginal Revenue
10 50 500
12 46 552 (552-500)2 26
14 42 588 (588-552)2 18
17 35 595 (595-588)3 2.33
25 30 750 (750-595)8 19.375
50 22 1100 (1100-750)25 14
150 14 2100 (2100-1100)100 10

Total Revenue  price per unit  units demanded
Marginal revenue is the contribution to total revenue due to the production of an extra unit of output.

Who I am
As a student from Saudi Arabia, I bring somewhat different views to the course and to my education. My background is quite important to me and it has helped to shape me in my quest for learning and deeper meaning. Where I come from, the majority of people are Muslims. What that means is that we have a deep respect for religion in general. Though we follow the Islam faith, we respect all other religions. That respect is mutual, though, as we expect to receive the same level of respect from others. Though my background is admittedly very different from many of the students around me, I feel that it has provided me with a worldly perspective that has been helpful in many studies, including the one I completed on the economic crisis.

What happened
I set forth on a journey to uncover some new, original insight on the economic crisis, which was something of an expansion for me. As a student, it can sometimes be difficult to fully grasp all that is going on in the world around you. Especially when talking about the economic crisis, it can be difficult to come to a full understanding of all of the implications, since students have not yet been exposed to many of the realities of the current economic crisis. Additionally, it can be difficult to form a complete analysis of the global economy without having studied all of the worlds systems and more importantly, how they interact with one another.

Though this was a somewhat ambitious effort on my part and I am not sure that I was prepared for the depth of analysis necessary when I began the study, it helped me to grow and develop some essential critical thinking skills. My ability to identify trends and recognize global indicators was enhanced, as this study was most certainly a positive for me as a student. Additionally, I learned to critically organize my own thoughts and perspectives, using my heritage as a basis for understanding the global economic situation.

What I learned
My learning stretched into both the specifics and the generalities of the global economic dynamic. Specifically, I learned that the economic crisis has a major effect on all of the central banks across the world, regardless of country. This is one of they key ideas of the module, as I learned that despite all of the economic differences and the philosophical differences that might exist between different nations, a crisis of this kind can serve to hit all nations equally hard. I learned that those countries with a solid central economic system and a solid foundation of economic thinkers would have the ability to resolve issues in much less time than those banks that did not.

Additionally, I took a hard look at what the practical implications of the study happened to be. Though it is easy to look at something from the outside and decide what is wrong with it, it is much more difficult to look for solutions and to figure out what a skilled economist might be able to do. I came to understand what a good economist might be able to do to actively fix the problems at hand in the global economic system. Another important element that I studied and discovered insights into was that economists had the power to keep such a crisis from happening in the future. With solid decisions and by carrying out a well-dictated plan, economists can keep the worlds economies from running into the problems that they have faced recently.

Another key element of what I learned was that the global economy hinges on what the American economy is able to do. When the American economy is not performing at its highest levels, economies all over the world are destined to struggle. This is because of the global trade and the fact that America is a major consumer of goods made in many other countries. Being a student from Saudi Arabia, I am not sure that I completely understood the full scope of the United States influence on the global economy until I dug into this study. I now understand that American prosperity is something that ultimately helps many other countries, and that there are plenty of countries that have a vested stake in seeing America succeed.

What I will do as a result
One of the best things about the study is that I can use both my experiences and my findings to shape my future as a student. Though it is unlikely that I will be able to go out and change the global economy on my own over the next few months, I do now have an understand that I can use to shape dialogue in the future. Additionally, I will be able to take what I have learned to better understand some of the arguments being posed about the global economy in the future.

As a student, the pure and honest act of uncovering new information and shaking aside my personal feelings on the issue is something that I found to be quite value. As I move forward, I will be able to take the individual research skills that I sharpened while completing this module, and I will apply them to everything that I do. This should enable me to produce more complete work and gain a deeper understanding of some of the resource material that I will be required to study over the next few months. I will use this study as a springboard for more looks into the global economic situation in the future, perhaps taking a more in-depth picture of individual economic relationships among relevant countries.

Extraction of exhaustible resource is seen as a simple profit maximization problem in the case of society or an individual. The main problem in this aspect of economy is mass balance. Once a natural resource has been exploited it is not replaceable and economic models predict massive rise of price for natural resources. One common economic model is the Hotelling rule that shows the price of nonrenewable resources will rise at real interest rate in efficient market equilibrium.

Hotelling rule has been a pillar in support for nonrenewable economics that tries to relate long run behavior of pricing natural resources and extraction of resources. Economic theory of relative prices is another model that relates prices of nonrenewable natural resources and extraction. Hotelling rule predicts that prices of nonrenewable resources increase at an exponential rate that equals exchange rate (Lars, 22). A mineral deposit in the soil is considered to a bond an in other aspects it is interchangeable with such a financial paper.

Hotelling rule was developed by Harold in the article Economics of Exhaustible Resources. The rule interprets the economic law of demand and supply that states when the demand is high and supply is low price of the commodity rises. In this aspect of nonrenewable resources, when the resources are extracted, they become scarce and this calls for rise in price. Price of exhaustible resources is not identical to neighboring costs or extraction costs as is defined by a model of complete competition.
Nonrenewable resources such as oil and minerals are usually extracted fast because of their value. This means that the owner of such resources will only leave nonrenewable resources in the soil if the value of such resources is considered to increase over a given period of time with market interest rate. A small change in value of nonrenewable resources would promote increase in market interest rate resulting to scarceness of the commodity (Beckwith, 14). This results to what economics call scarceness pension which is an indication of promotion in additional unit of a resource.

Development of scarceness pension with market interest rate is called Hotelling rule. Many economic models in nonrenewable resources economics are usually based on this rule. Nonrenewable resources are always available in small and limited quantities. This means that the usage of such resources should be done in a proper and appropriate means so as to avoid wastage. Any period in which nonrenewable resources are used it results to consumption of resources leading to diminishment.

Hotelling rule and economic theory of relative prices may not suggest a fixed price for ever increasing non-renewable resources. The Hotelling rule takes interest rate as is given when the resource sector is considered to be in isolation. In this instance, critical information is lost because interaction between marginal productivity of capital and nonrenewable resources is not considered. The main reason that will lead to increase in price for nonrenewable resources is the level of extraction and marginal productivity of capital (Houston, 61).

Marginal productivity of capital will definitely decrease as a result of change in resource extraction. The extraction process of nonrenewable resources is dominated by decrease in the percentage change in capital. This means that the rental rate in respect to extraction of nonrenewable resources will decrease. Consequently, the price of nonrenewable resources will decline because as per Hotelling rule, the rate of increase in nonrenewable resource price does not deviate from real interest rate.

Communication is a very important element that plays a vital role in our daily lives. We experience communication almost every time. In businesses, it matters a lot one mistake or careless way of talking can put a person to face unfavorable consequences. Communication has its basic purpose of delivering the message in a way that the other person understands it, accepts it, take it forward, and act on the idea or thought that is conveyed. Such communication is called Effective communication. There are different ways of communicating different types of messages. For instance, there are two main approaches to communicate bad news messages. First, direct approach and the second is indirect approach.

The most appropriate choice of communicating the negative messages or bad news messages to the employee is to use Lean Communication. Lean communication basically involves the use of indirect approach that further uses a buffer that minimizes or lowers the shock produced by the bad news. In this way, the impact of bad news is lesser than when we communicate in direct approach. Lean communication is a good approach that is very beneficial for times when theres less time, bad news, and the message ought to be communicated in an effective way. Moreover, it uses the tool of respect while communicating with the other person. When giving respect and talking humbly with others, one can easily gain control of emotions of that person and can persuade him or her to understand and act on a certain thought or idea that we are communicating.

Therefore, lean communication channel enables a person to effectively pass on his message to the other person in a short and timely manner, with quality, with respect, and in an indirect way, which in turn leads to a successful communication between the persons without having any conflict.

Economics revolve around every aspect of human life in a society. It focuses on the use of scarce resources to produce goods and services, distribution of these produce to the consumers and finally consumption. Economic models have sprung-up in the recent times to define what economics is actually about. Arnold (2007) for instance, puts more weight on the scarcity of resources and how the individuals and society applies knowledge to manage these limited resources in order to satisfy wants. Basically, the science applied to improve production of goods and services using scarce resources constitute economics.

Economic growth is therefore vital for a countrys development. To start with, it ensures increase in the quantity of production of both goods and services in a society. Economic growth also brings forth new and better goods into the market therefore enhancing consumer satisfaction. This improves the general living standards of the people. Sustainability of such growth should therefore be ensured to increase the per capita income, improve health as well as education and finally improve the environment. Knowledge gained from economics studies is therefore important in the development of a country. Application of such skills helps improve a countrys living standards (Mankiw, 2008).

In order to determine a countrys economic growth, focus has to be directed to the whole market economy by considering broader perspective of inflation, recession as well as unemployment among other variables. These indicators guide the country in the proper management of scarce resources to improve productivity hence improving living standards. The macroeconomic performance of a country is therefore analyzed through studying the trends in Gross Domestic Product (GDP), Inflation as well as rate of employment.

The measure of value of goods and services that a country is able to produce in one year constitutes the Gross Domestic Product. This value may change in the market either as a result of changes in quantity or prices (Taylor, 2006). Changes in prices of goods and services have posed challenges while applying GDP as a measure of economic growth. Modern economists have therefore adopted a better method by utilizing real GDP. This method involves the adjustment of measure of production to encompass changes in prices of goods and services. Real GDP therefore provides an elaborate and accurate measure of how the economy is performing (Taylor, 2006). An increase in real GDP reflects a countrys expansion of economy and vice versa. In U.S for instance, there was about 2.4 percent decrease in real GDP in 2009 compared to an upward surge of 0.4 percent the previous year. The current U.S GDP (2009) is estimated to be about 14.2 trillion down from 14.3 trillion. This has been attributed to many factors among them reduction in the countys export, low non-residential fixed investment, increased consumer consumption expenditure as well as reduced private inventory investment (Arnold, 2007). Generally real GDP is affected by the rate of a countrys expenditure compared to its income.

Real GDP alone can not provide sufficient information on the economic performance and therefore other variables have to be considered as well. Inflation is one of the variables which have affected most countries in the world and its effects are still felt. It is basically a percentage increase in costs of goods and services calculated within a specified time period. It is associated with rise in prices as well as decline in money value. According to Mankiv (2008), inflation rate was higher in U.S during 1970s than expected. However, its rise has been witnessed more in the recent past. The rise in price means consumers are paying more for the goods and services. A strategy should therefore be put in place to counter the rise in prices (Arnold, 2007).

Economic growth of a country is reflected by the production capacity of that country. This relies directly on the countrys labor force. Unemployment therefore deprives a country of this important human resource. More employment means more labor force and therefore more quantity of goods and services a country can produce. It is therefore vivid that full employment of people in a country ensures a countrys economic growth. Rate of employment in many OECD countries for instance has increased in contrast to that of U.S. In 2007 OECD countries employment rate decreased to 1.5 percent compared 1.7 percent in the previous years. This has been followed by a steady increase in growth rate. Countries such as Russia and France recorded an employment growth rate of about 1percent in 2007 compared to Spain which recorded a decrease in employment growth rate by the same margin. The economic growth rate in U.S has been affected by the retarded economic activity in the country.  Achievement of full employment is sometimes hard to achieve since certain extent of unemployment is unavoidable (Mankiw, 2008).

Macroeconomic performance of a country can only be valued against the set goals and objectives. The achievement of these targets would result in the improvement of living standards of people in a country. According to Keynesian economics theory, the performance of macro economy is greatly influenced by the private sector decisions. The model articulates the inefficiency of the performance outcome of many economies to poor decisions by the private sector. The theory therefore suggests stabilization of economic output by public sector as well as the governments intervention through adoption of regulatory policies. The model provides for government intervention through implementation of fiscal policy whereby the government influences the economy by use of its expenditure as well as revenue collection. The government therefore has the capability and the resources needed to increase the labor force hence realization of full employment (Taylor, 2007).

 Expansionary fiscal policy increases a countrys economic output, income as well as employment. This policy is very useful to the government and can be used to move the government out of recession because increase in output means increase in income compared to expenditure and therefore reduction in deficit. However, the expansionary fiscal policy through increase in taxation, can lead to excess government spending excluding private sector from doing so hence increasing the budget deficit. This may increase government debt as well since the private sector has been eliminated from the borrowing arena. All these factors will make the macroeconomic goals unachievable (Carbaugh, 2006). These goals include full employment, economic growth as well as stability.

Full employment is only achievable after utilization of available resources to produce goods and services. Production of goods and services from the scarce resources therefore ensures satisfaction of wants and needs of a country. Employment of labor force is therefore paramount to realize this goal. Classical model stipulates that full employment can only be achieved in the absence of factors that regulate market demand and supply. This is possible when the price of product is assumed too (Carbaugh, 2006).

Economic growth on the other hand depends on the income per capita. Increase in production of goods and services directly increase the income of a country. This is measured by increase in GDP as well as other variables as earlier mentioned. Increase in rate of production is therefore a goal whose achievement will ensure general improvement of living standards (Tailor, 2007). Stability is another goal of macroeconomics only achieved when there is a steady growth rate and no fluctuations in prices, production as well as employment rates witnessed (Dodge, 2007).

The economy makers should adopt a strategy aimed at providing a suitable environment for both the government and the private sector to thrive in a manner that the macroeconomic goals can be achieved. Expansionary fiscal policy should be amended so that it limits the government ability to crowd out the private sector. However, cutting tax as implemented in the policy is a positive idea.

Conclusion
Different rates of economic growth have been witnessed in many parts of the world. This however, depends on varied economic policies guiding different countries as well as the management strategies employed. Comprehensive policies along with proper and transparent management style ensures steady and positive economic growth and vice versa. This therefore improves the living standards of a country. Unfortunately, the trend has been affected by the recently witnessed global inflation.

In general, agency considered as the relationship between principal (Investor) and an agent. The idea of agency has become a source of increasing a confusion and strain in social thought. So many theories, Variants of action theory, normative theory and political analysis have defined brought around the concept in often conflicting and overlapping ways. As a result of the converse of the term agency keep up itself an elusive, albeit significant, ambiguity. It has all very hardly inspired analysis in spite of the terms with which has been related Personality, motivation, purposive ness, choice, inventiveness, freedom, and creativity (Emir Bayer and Mische 2010, pp. 962-1023). People want freedom to make their choices about their lives. In sometimes, it is important than accomplish the needs which the agency or the ability to set and follow ones own goals and interests.

 In other words, the agency defined as obviously plural in both concept and measurement. Amartya sens capability and approach views agency is an assessment of what a person can do in line with his or her conception of the good (Sen 1985b, p.206).

According to Sen, for development and poverty reduction activities to promote agency, the people have to be seen as being actively involved- given the opportunity  in shaping their own destiny, and not just as passive recipients of the fruits of cunning development programs (Basu and Kanbur 2008, pp962-1023).

Measures of Agency
Sens account of agency explains different and plural features that are relevant measures to agency
Agency is exercised with respect to goals the person values
Agency includes effective power as well as direct control
Agency may advance wellbeing or may address other regarding             goals
To identify agency also entails an assessment of the value of the agents goals
The agents responsibility for a state of affairs should be incorporated into his or her evaluation of it.
The first one, Agency is exercised with respect to goals and the person values. It implicates the agency exercised with multiple aims certainly it cannot be defined with out the subject of goals. The agency goals with respect to every one may be various with their goals, and the goal includes the affectionate family relationships. So the goal must be a more inspiring reading group.

Second, agency may include effective power with control. Effective power is the power to achieve the goals of the person or groups. Simply the effective power means how the choices are made and implement. Sen describes effective power exercised in line with what we would have chosen and because of it (Sen 1985b, p.211).

Third, Agency may comfort and may deal with other goals. However the agency and well being perspectives stay behind distinct. Agency have not only advance well being aspects, it may be other regarding. The distinction is sharply clear in the situations of which acting as an agent may reduce other aspects of well being. Agency has open conditionality in the sense that is any type of aim, but advances any goals which the person thinks it is important for themselves and their community.

Fourth, by definition the agency associated to goals that the person values. In addition, the recognition of agency involves some assessment of those goals. The open conditionally view of agency does not imply. That anything that appeals to a person must, for that reason, come into the accounting of his agency freedom. The need for careful assessment of aims, allegiances, objectives, etc., and of the conception of the good, may be important and exacting. (Sen 1985b, p.204).

Fifth, the agents responsibility for a state of affairs and his or her subsequent response to it, will include, if relevant, an assessment of person responsibility in brining about that situation. (Sen 1983 Sen 1985b). This fifth characteristic seems do not appropriate to agency, but a state of affairs which include a persons role in creating it and thus should convey responsibility.

Concrete measures are needed to explore such aspects of agency in many different settings (Alkire 2006). First we analyze the proxy measures of agency, but it is not a sufficient measure to agency. There are four measures according to their relationship in Sens concept of agency.

These are
i) Agency as global or multidimensional
Agency as direct control and effective power
Agency as advancing wellbeing freedom or other commitments
        iv)  Agency as autonomy or ability.
Proxy Measures of Agency

By measuring the presence or absence of pre-requisites, it is perceptible to identify the agency and poverty. The common proxy measures of agency are literacy, Schooling, frequency of radioTV listening, membership in organizations, employment status, health status, land ownership, food expenditure (Alsop  Heinsohn 2005). The analysis of these measures are differ, not the data. For example, we see Alsop  Heinsohns (2005) masterful review of the literature, literacy and level of income was used to reflect agency in Ethiopia, Nepal and Honduras countries studies reports. Redundancy of agency and poverty indicators exclude meaningful experimental study of the connections between agency and poverty. Hence to clarify the prominent role of agency in poverty reduction the empirical analyses are important. Individual indicators are required for poverty and agency.

However, such measures represent complex concepts the primary appeal of those measures are concrete and tangible.  We examine an illustration of the measurement of shame.  A man cannot go out without shame, if he be short of a linen shirt and leather shoes. By this example, we understood any self respecting analyst of shame would immediately set about to measure the tenure of linen and leather. So there are number of problems by using of assets proxy measures of agency. First, assets may not interpret into agency and in the same way for different individuals. This problem is corresponding to the issues with assets as sufficient indicators of functioning and happens because of human diversity. Like this many proxy measures are actually identical to measure poverty, such as years of schooling, employment status or asset ownership or health status.

Thus three problems arise by the use of proxy measure as agency measures. First, the translation of assets to agency is implicit to assume consistently. Second, agency expansions caused by a different trigger may be raised.  Third, explore the connections between agency and poverty is not possible by using of same indicators to characterize both phenomena.

Global and multidimensional
Some measures of agency are global in the sense that a single indicator, for example parents education. Even though the levels of agency are differ, the permeable boundaries between kinds of agency for the exercise of agency in different domains, yet if they have common skills. Scrutiny of the evidence, however, has called into question such hypothesis, so unless different analyses come forward, separate measures for different dimensions of agency should increase global measures. In Practice the domains that have been selected represent either a) the persons different kinds of goals or the role played by the person, or b) potentially coercive forces that could obstruct agency. The theoretical plurality of agency raises the preference of multidimensional measures of agency in measurement. The global and multidimensional measures to agency might need to be justified by empirical characteristics of the data.

Direct control and Effective power
A large focus upon agency by the current indicators of agency is direct control, and rather less clearly on agency as effective power. Agency is defined as an actors or groups ability to make purposeful choices  that is, the actor is able to envisage and purposively choose options (Alsop et al.2006 p.11). The persons direct action (choice-making) is the only exemplify characteristic of agency.

One limitation of control measures is that the people do not convey whether the lack of control (decision making) is favored by the respondent people may prefer not to be concerned with certain decisions but assign them to others. Another limitation of control measures is that they dont convey whether the actions are successful in terms of the agency goals. The measurement of effective power is clearly more challenging than direct control. External Capabilities written by Foster and Handy classifies similar issue and their measurement of external capabilities would be probably equivalent to effective power.

Advancing well-being freedom or Other Commitments
The all measures of agency reflect direct or indirect goals of agency and the   persons own well-being freedom. Narayan and Petesch write that Agency is about peoples ability to act individually or collectively to further their own interests (Narayan  Petesch 2007, p.15). The thought of other-regarding agency is intricate than simple measurements, it may require analyses by compared other measures. Some times people not snatch their potential effective power by themselves and such failures to notice may stimulate functioning.  Further If the people do have such power to effect change for others well-being, they may be encouraged to consider their imperfect obligation to use such power on behalf of others (Anand  Sen 2000).

Autonomy or Ability
Sen explains, the agency can never be detained and based on observation it is a single indicator because the term itself has another meaning. Agency is a persons ability to act on behalf of things they value and have reason to value. So there are two different aspects of agency
Autonomy  whether people are able to act on behalf of what they themselves value (it matters not whether the respondent has reason to value them)

Ability  whether people are able to act on behalf of things that they are assumed to have reason to value (whether or not the respondent actually values them)

Autonomy investigates the persons own understanding capacity of their situation and Ability examines the objective powers of a person enjoys or uses. In some cases People determine value on based upon their own reasons to value and people have the essential skills to use their autonomy.  So we can say autonomy and ability will coincide. Autonomy presents ability and ability presents autonomy and the both will present agency. People may have certain capabilities, but intimidate to use the abilities. In these cases the ability and autonomy were deviate (Alkira).

Conclusion
Agency is exercised with respect to goals and the person values. Proxy measures of agency used assets to measure the persons values and poverty. It is not possible to measure exactly by the proxy measures. Sen describes four measures to agency. These measures are 1) Global or multidimensional 2) Effective power and direct control 3) Advancing well-being freedom 4) Autonomy and Ability. Douglass claimed that, A persons greatness consists in his ability to do, and the proper application of his powers to things needed to be done.  The development of different measures of individual agency may be useful to support the kinds of agency.

The issue about healthcare in the US has been debated for a long time, and it normally comes to the forefront when an administration seeks to institute reforms. Efforts to reform it in the 1990s produced frenzy results which is a reflection of what is happening at the moment as President Barrack Obama embarked on the same. According to critics, there is no other highly developed country in the world that has a healthcare system similar to that of the United States (W. Gallstone 2009). Despite the fact that the US excels in advanced medical technology, a large percentage of its population is uninsured. The big question is the position of the government on this matter.

What economists say about the US healthcare and comparison to other countries
According to economists, the government is failing to provide covered healthcare for its citizens in line with historical laws and that the major factor affecting responses to any government initiative is lack of trust in the government ( Americas Senior Moment  2005). When the public lacks confidence in the government, then it will tend to thwart every form of reform that it comes up with even if the reform has positive impacts because people think that the government may have some strings attached to it.
The most criticized idea is about the employers  mandate. This is making all except the smallest employers  provision of healthcare a requirement, with the choice of contributing to a public fund instead. This and the benefits from an underlying value that employers have a responsibility where their employees  health insurance is concerned  have been tested with the public many times.

Another element that has already been known to be problematic before economists about the public is the individual mandate which would require everyone to have health insurance, with financial help if necessary. The alarming thing about it is that those who will not comply will be spurred by penalties. Also, the idea of savings can be found in the healthcare system - especially in Medicare -  through streamlining, cutting waste and tracking down fraud and abuse. This has triggered a forceful reply that the heath of senior citizens would be endangered by any process of looking for cost savings in Medicare.

People mostly exposed to healthcare
In the US, all people want to have access to a better healthcare within the shortest time possible, and the poorest members of the society need reliable access to doctors and hospitals. That is what President Obama is advocating, and in his first year in office, he proposed a health reform that was intense and multidimensional to the economics of the heath care industry. He was after increasing access for millions of Americans who do not have health insurance and uplifting the level of service for the poor people and preexisting illnesses.

There has been a lot of heated debate on how to access resources to increase the healthcare services for those who do not have enough, and other critics argued that the money would be used to pursue a different project. The money, however, according to the reform, would be obtained from cardilac plan services and, in this case, healthcare was to be imposed on other goods to sacrifice individuals with high premiums. The legislation was to tackle policies with annual premiums of 8, 000 and more, and 23, 000 for individuals and families respectively (W. Gallstone 2009).

Why healthcare is most expensive in the US
For many years, politicians and insurance companies could blithely proclaim that the US had the best healthcare system in the world but major shortcomings became more visible. Approximately 42.6 million people in the US currently without health insurance are acutely aware that the healthcare system is not working for every one, and there is a growing concern that the major problems of rising costs and lack of access constitute a real crisis. Policy makers at times have attempted to address the symptoms of the health crisis in the US through short-term, patch work solutions under the pressure of time constraints in political decision making, rather than analyzing the system itself as a whole.

The US has by far the most expensive healthcare system in the world based on health expenditures per person, and on total expenditures as a percentage of Gross Domestic Product (GDP). For example, in 1998, it spent a whopping 4,178 per capita on healthcare more than twice the OECD median of 1,783, far more than its closest competitor Switzerland which is 2,784. The US health spending as a percentage of GDP was 13.6 which is also outdistancing the next most expensive health systems, i.e., Germany and Switzerland with 10.6 and 10.4 respectively (C. Schoen et al. 2005).

The graph below shows the health spending per capita for some selected OECD countries in comparison with the US.

Cited from httpdll.umaine.edubleU.S.20HCweb.pdf
The reasons to the high cost of healthcare in the US can be attributed to a number of factors, ranging from the rising costs of medical technology and prescription drugs to the high administrative costs resulting from the complex multiple payer system in the US. For instance, it is estimated that between 19.3 and 24.1 of the total dollars spent on healthcare in the US is spent simply on administration costs. The growing shift from nonprofit hospital chains has contributed to the increased costs in healthcare.
The high proportion of people who are uninsured in the US - 15.5 in 1999 - contributed directly to expensive healthcare because conditions that could be either prevented or treated inexpensively in the early stages often develop into health crises (W. Gallstone 2009). The treatment of crisis conditions later on is much more expensive, for instance, emergency room treatment, or intensive care when an untreated illness progresses to a more serious stage. Also, the aging of the population in the US is a major contributor to increases in the cost of healthcare.

Approximate cost of providing healthcare to all US citizens
According to figures available for 1997-1999, 42.6 million people in America were uninsured in 1999,  which is slightly down from the 1997 and 1998 figures. It is an embarrassment to many policy makers in the US that there is no universal coverage. However, more seriously, it is a matter of life and death for people who do not have access to care in many cases.

The following table represents the expenditure of the US in healthcare in comparison with other countries whose expenditure is believed to be high.

Cited from httpdll.umaine.edubleU.S.20HCweb.pdf
 The lack of health insurance for a significant portion of Americans also has other far-reaching consequences, as hospitals and other care providers are forced into cost shifting at the expense of taxpayers and higher premiums for those who are with private insurance (C. Schoen et al. 2005). One possible approach that has been advocated by some healthcare experts is to simply expand Medicare, an existing and highly successful public program which could be extended beyond the elderly to the entire population.