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The National Health Service (NHS) in the UK was founded in 1948 and was the first state-run freehealth service in the world. It originated at a time of national euphoria following victory in World War II, which generated a sense of confidence and solidarity among politicians and public. In particular it was felt that class distinctions were finally disappearing. The extensive rationing of products, both during and after the war, played a big part. Not only did this result in queuing for goods by rich and poor alike, but it gave the government a sense that state control of distribution was not only possible but in many cases desirable. The basic objective was to provide all people with free medical, dental and nursing care. Questions 3 Illustrate the hospital-versus-hospital trade-off using an isoquant/isocost graph and explaining the economic principles involved in obtaining an optimal situation. In what important respects does this issue differ from the issue in the previous question?
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