Describe the process of creative destruction using a specific ...

[DyllonKazuo]

Describe the process of creative destruction using a specific example.
 
  What will be an ideal response?

Question 2

In what ways do economists and policymakers who believe that market-based reforms are the key to improving the health care system criticize the Patient Protection and Affordable Care Act (ACA)?
 
  What will be an ideal response?

[KKcool]

Answer to Question 1

Creative destruction, based on the ideas of Joseph Schumpeter, describes the process whereby older products are driven out of the market by newer products. New products that meet consumer wants in qualitatively better ways will increase the overall standard of living for an economy. Here are some current and historical examples of creative destruction: DVD players replaced video tapes and VHS recorders, calculators replaced slide rules, clocks replaced sundials, cars replaced horses and buggies, disposable diapers replaced cloth diapers, GameBoys and Xboxes replaced Ataris, Internet Explorer replaced NCSA Mosaic, CD players replaced tape players, indoor plumbing replaced outhouses, iPods replaced Walkmans, phones replaced the telegraph, planes replaced trains for travel, digital cameras replaced film cameras, and electricity replaced candlelight and gas lights.

Answer to Question 2

These people believe that the market for health care should change so it is more like the markets for other goods and services, where the prices consumers pay and that suppliers receive would do a better job of conveying information on consumer demand and supplier costs. Increased competition in the market for health care services would reduce costs and increase economic efficiency. Those in favor of market-based reforms criticize the ACA for not adopting this approach.