1. The determinants of resource demand include changes in product demand, changes in productivity, changes in the price of substitute resources, changes in the price of complementary resources and the elasticity of resource demand. Read the article "Alive and kicking The digital surge in healthcare - How will the pandemic change health care?" The Economist Dec 5th 2020. Identify and explain how these factors are affecting the demand for resources in the healthcare market. Innovative responses to the healthcare pandemic paved the way for potential significant increases in efficiency in the healthcare industry. List and explain the obstacles which may prevent market forces from generating these efficiencies. Article: Alive and kicking The digital surge in health care How will the pandemic change health care? The Economist Dec 5th 2020 Vast, bureaucratic and amorphous, health care has long been cautious about change. However, the biggest emergency in decades has caused a revolution. From laboratories to operating theatres, the industry's metabolism has soared, as medical workers have scrambled to help the sick. Hastily and often successfully, they have improvised with new technologies. Their creativity holds the promise of a new era of innovation that will lower costs, boost access for the poor and improve treatment. But to sustain it, governments must stop powerful lobbies from blocking the innovation surge when the pandemic abates. Covid-19 has led to the spectacular development of vaccines using novel mrna technologies. But there have also been countless smaller miracles as health workers have experimented to save lives (see article). Obsolete it-procurement rules have been binned and video-calls and voice-transcription software adopted. Machines are being maintained remotely by their makers. With patients stuck at home, doctors have rushed to adopt digital monitoring of those recovering from heart attacks. Organisational silos have been dismantled. All this has taken place alongside a boom in venture-capital-raising for medical innovation: $8bn worldwide in the most recent quarter, double the figure from a year earlier. jd Health, a Chinese digital-medicine star, has just listed in Hong Kong (see article). More innovation is needed. Global health spending accounts for 5% of gdp in poor countries, 9% in rich ones and 17% in America. The industry employs over 200m people and generates more than $300bn of profits a year. But as well as being risk-averse, it is insulated from change. Patients may not know which treatments are effective. The need to pool risk among many people creates administrative leviathans, typically national-health schemes in Europe, or insurers in America and some emerging economies. Complex rules enable firms to extract high profits. The result is that productivity growth has been sluggish. High costs mean that many people in the developing world lack access to health care. Low efficiency may cause a fiscal crisis in some rich countries over the next two decades, as ageing populations force medical bills up further. The pandemic helped show what is possible, partly because it got people to put aside their caution. Remote medical consultation and monitoring can lower costs and increase access. The share of remote visits at the Mayo Clinic, an American health provider, rose from 4% before the pandemic to 85% at the peak. Sehat Kahani, a Pakistani firm, has helped female remote doctors treat the poor in a socially conservative society. Ping An Good Doctor, a Chinese portal, had 1.1bn visits during the height of the pandemic there. A surge in online pharmacy would increase competition. On November 17th Amazon announced its entry into the field, which promises to disrupt America's industry dominated by big pharma and middlemen. That is just the start. Data-rich diagnosis could help specialists in routine analysis of, say, medical scans such as x-rays. A new generation of continuous glucose monitors for diabetics benefits from recent improvements in sensors. In time artificial intelligence will lead to drug innovations. This week DeepMind, an ai laboratory, announced a breakthrough in the analysis of proteins (see article). Many of these trends should improve efficiency directlywith lower office rents, or the allocation of doctors in real time to rural areas where surgeries are scarce. But they are also likely to unleash a burst of competition and continuous improvement. More data will make it simpler to judge which treatments are most effective, the holy grail of medicine. Personal-health monitoring will mean that treatment becomes more preventive rather than reactive. And with more information, patients can make better decisions. Governments can do their bit to help. Big health-care firms, such as insurers, and state-run health schemes, should be eager to recognise new digital services and pay for them. Germany and China have passed laws or new rules urging reimbursements of online services, for example. The evaluation of digital services for efficacy should be faster. America's Food and Drug Administration has modernised its approval process for apps. The other priority for governments is to build a system for the flow of health-care data. Individuals should have control over their records and grant permission to providers to gain access to them. India is creating national health ids that will aim to combine privacy with mass data. Around the world hundreds of millions of medical records need to be anonymised and aggregated more efficiently so that researchers can scour data sets for patterns. A rare chance to improve the quality of health care and lower its costs may vanish by the end of 2021. Exhausted health-care workers may prefer a rest to a revolution. Some of today's medtech startups will flop, prompting a backlash. A few big tech firms may try to monopolise pools of data. And the industry's powerful lobbies will try to lock out competitors. Health care is not a field where you set out to learn from your mistakes. Yet the pandemic has revealed that the industry became too used to being careful. It has redefined what is possible Read the article "Killing coal Time to make coal history - Coal is at the toxic heart of the fossil fuel economy" December 3rd 2020 The Economist. Explain the market forces which have significantly reduced the demand for coal. Explain how these market events relate to the economic principles covered in the chapter investigating resource demand. Explain how economic events in the coal market will have an effect on employment opportunities, environmental issues and the geopolitical relationships among China, the United States and Europe Article: Killing coal Time to make coal history Coal is at the toxic heart of the fossil fuel economy December 3rd 2020 The Economist Around the world the mood is shifting. Xi Jinping has adopted a target to cut China's net carbon emissions to zero by 2060. Under Joe Biden, America will rejoin the Paris agreement, which it adopted five years ago. In the financial markets clean-energy firms are all the rage. This month Tesla will join the s&p 500 share indexas one of its largest members. Remarkably, in a realm where words are cheap, there has been action, too. In America and Europe the consumption of coal, the largest source of greenhouse gases, has fallen by 34% since 2009. The International Energy Agency, an intergovernmental body, reckons that global use will never surpass its pre-covid peak. Yet coal still accounts for around 27% of the raw energy used to power everything from cars to electric grids. Unlike natural gas and oil, it is concentrated carbon, and thus it accounts for a staggering 39% of annual emissions of CO2 from fossil fuels (see Briefing). If global emissions are to fall far enough, fast enough, the task now is to double down on the West's success and repeat it in Asia. It will not be easy. Coal came of age in the Industrial Revolution. In the rich world its use in furnaces and boilers peaked in the 1930s and faded as cleaner fuels became available. Consumption in the West has recently collapsed. In Britain the last coal-fired power plants could close as soon as 2022. Peabody Energy, a big American coal miner, has warned that it may go bankrupt for the second time in five years. Although carbon prices accelerated the shift in Europe, the Trump administration has favoured America's coal industry with deregulation and political supportand still it has declined. One reason is competition from cheap natural gas produced in America by fracking. Tax credits and subsidies have prompted renewables to scale up, which has in turn helped drive down their costs. Solar farms and onshore wind are now the cheapest source of new electricity for at least two-thirds of the world's population, says Bloombergnef, a data group. As coal faces cleaner rivals and the prospect of more regulation, banks and investors are turning away, raising coal's cost of capital. This is a victory, but only a partial one. In the past decade, as Europe has turned against coal, consumption in Asia has grown by a quarter. The continent now accounts for 77% of all coal use. China alone burns more than two-thirds of that, followed by India. Coal dominates in some medium-sized, fast- growing economies, including Indonesia and Vietnam. If the aim is to limit global temperature rises to 2C above pre-industrial levels, it is no good waiting for Asia's appetite for coal to fade. New plants are still being built. Many completed ones are not yet fully utilised and still have decades of life in them. Nor is it enough to expect a solution from "clean coal" technologies, which aim to capture and store emissions as they are released. They may help deal with pollution from industrial uses, such as steelmaking, but they are too expensive for power generation. Hence Asia needs new policies to kick its coal habit, and soon. The goal should be to stop new coal-fired power plants being built and to retire existing ones. Some countries have taken a first step, by imposing new targets and bans. The Philippines has declared a moratorium on new plants; Japan and Bangladesh are slowing construction, too. China's new five-year-plan, which will be published next year, may limit coal use. It should set its cap at current levels, so that the decline can start immediately. If targets are to be credible, Asian countries must tackle deeper problems. The strategy that worked in Europe and America will get them only so far, because the mining firms, power stations, equipment- makers and the banks that finance them are often state-controlled. Market forces and carbon taxes, which use price signals to change incentives, are therefore less effective. And coal politics is treacherous. The coal economy forms a nexus of employment, debt, tax revenues and exports. China has used its Belt and Road Initiative to sell both mining machinery and power plants. Across the region, local governments depend on coal for revenues. Many will defend it ferociously. One step in fighting regional lobbies is to redesign power systems so that renewables can compete fairly and incentives work. Most renewables provide only intermittent power, because the weather is changeable. National smart grids can mitigate this by connecting different regions. Too many of Asia's electricity systems muffle market signals because they are locked into legacy long-term supply contracts with coal firms, and because they are riddled with opaque subsidies and price caps. Removing these so that markets and taxes work better will let renewable power undercut coal. The other step is to compensate losers. The lesson from destitute mining towns in south Wales and West Virginia is that job losses store up political tensions. Coal India, the national mining colossus, has 270,000 workers. From Shanxi province in China to Jharkhand in India, local governments will need fiscal transfers to help rebalance their economies. Banks may need to be recapitalised: China's state lenders may have up to $1trn at stake. Europe and America have shown that King Coal can be dethroned, but they cannot be bystanders as Asia works to complete the revolution. Coal powered the West's development. In 2019 coal consumption per person in India was less than half that in America. It is in Asia's long-term interests to topple coal, but the short-term political and economic costs are large enough that action may be too slow. If politicians in Europe and America are serious about fighting global warming, they must work harder to depress coal elsewhere. That includes honouring prior promises to help developing countries deal with climate change. Ultimately, though, the responsibility will lie with Asia itself. And the good news is that it is overwhelmingly in Asia's interest to do so. Its people, infrastructure and agriculture are dangerously exposed to the droughts, flooding, storms and rising sea levels caused by climate change. A growing middle class yearns for their governments to clean up Asia's choking metropolises. And renewable energy offers a path to cheaper power, generated at home, as well as a source of industrial employment and innovation. Coal's days are numbered. The sooner it is consigned to museums and history books, the better