In which of the following ways is cost-benefit analysis different from cost-utility (cost-effectiveness) analysis in evaluating health interventions or public programs?

QUIZ

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In which of the following ways is cost-benefit analysis different from cost-utility (cost-effectiveness) analysis in evaluating health interventions or public programs?

 

Question 1 options:

 

A)

 

Cost-benefit analysis compares societal costs and benefits whereas cost-utility analysis looks only at gains to specific people.

 

 

B)

 

Cost-benefit analysis is worse than cost-utility analysis in settings where there are externalities (for example, price signals do not work).

 

 

C)

 

Cost-benefit analysis uses present discounted values to account for long-run impacts of interventions, while cost-utility analysis does not.

 

 

D)

 

Cost-benefit analysis weights the utility of being sick and of being well differently, while cost-utility analysis does not.

 

Question 2 (1 point)

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A new breast cancer drug stops tumor growth for 18 months with no side effects. An estimated treatment cost is $66,000. What is the cost per Quality-Adjusted Life Year (QALY)?

 

Question 2 options:

 

A)

 

$99,000

 

 

B)

 

$44,000

 

 

C)

 

$66,000

 

 

D)

 

$180,000

 

Question 3 (1 point)

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More dangerous jobs sometimes pay more. If a study demonstrates that for each 0.1% increase in death, an additional $7,000 is typically paid, what is the estimated value of life?

 

Question 3 options:

 

A)

 

$7,000,000

 

 

B)

 

$700,000

 

 

C)

 

$70,000

 

 

D)

 

$7,000

 

Question 4 (1 point)

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What is the approximate percentage of healthcare spending currently paid by the government?

 

Question 4 options:

 

A)

 

30%

 

 

B)

 

50%

 

 

C)

 

75%

 

 

D)

 

90%

 

Question 5 (1 point)

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What is the approximate percentage of healthcare spending currently paid out-of-pocket by individuals?

 

Question 5 options:

 

A)

 

10%

 

 

B)

 

25%

 

 

C)

 

30%

 

 

D)

 

50%

 

Question 6 (1 point)

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It is often said that “developed” countries, like the United States, practice “flat of the curve” medicine. What does this mean?

 

Question 6 options:

 

A)

 

Because developed countries spend a relatively large amount on healthcare, the opportunities for further dramatic health gains have already largely been exhausted.

 

 

B)

 

Although developed countries spend a relatively large amount on healthcare, the opportunities for dramatic health gains have yet to be realized.

 

 

C)

 

Because developing countries spend a relatively small amount on healthcare, the opportunities for dramatic health gains have yet to be realized.

 

 

D)

 

Because healthcare spending in developed countries has stopped growing, there will be no further gains in health.

 

Question 7 (1 point)

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In the United States, spending on healthcare accounts for approximately what proportion of gross domestic product (GDP)?

 

Question 7 options:

 

A)

 

18%

 

 

B)

 

8%

 

 

C)

 

16%

 

 

D)

 

28%

 

Question 8 (1 point)

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For questions 9 and 10, assume a competitive labor market for doctors, and use standard supply and demand analysis.

 

Suppose the number of doctors graduating increases. Which of the following statements is true in the labor market for doctors?

 

Question 8 options:

 

A)

 

The demand curve will shift to the left.

 

 

B)

 

The supply curve will shift to the left.

 

 

C)

 

The supply curve will shift to the right.

 

 

D)

 

The demand curve will shift to the right.

 

Question 9 (1 point)

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For questions 9 and 10, assume a competitive labor market for doctors, and use standard supply and demand analysis.

 

Again, assume that there is an increase in the number of doctors. There is also a simultaneous increase in the average age of the patient population, and therefore there is an increased need for doctors to meet the rising demand for medical services. Relative to the initial situation (before either change occurred), which of the following statements is true in the labor market for doctors? The wage paid to doctors _____________.

 

Question 9 options:

 

A)

 

must fall

 

 

B)

 

must rise

 

 

C)

 

will fall if the demand for doctors rises more than the supply of doctors rises

 

 

D)

 

will rise if the demand for doctors rises more than the supply of doctors rises

 

Question 10 (1 point)

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Health economists use the phrase “ceteris paribus” to express:

 

Question 10 options:

 

A)

 

Resources are scarce.

 

 

B)

 

There’s no such thing as a free lunch.

 

 

C)

 

All else being equal

 

 

D)

 

Good events lead to further good outcomes.

 

Question 11 (1 point)

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Suppose market demand for medical care is QD = 200 – 2P and market supply is QS = 40 + 2P. Calculate equilibrium quantity and price, assuming no health insurance is available.

 

Question 11 options:

 

A)

 

Price = 40; Quantity = 120

 

 

B)

 

Price = 120; Quantity = 40

 

 

C)

 

Price = 40; Quantity = 80

 

 

D)

 

Price = 60; Quantity = 120

 

Question 12 (1 point)

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Though we speak about healthcare as a good, it has some special characteristics that makes it different from other goods. Which of the following is one of these differences?

 

Question 12 options:

 

A)

 

People are willing to pay for healthcare, but not for health.

 

 

B)

 

Healthcare is a scarce good.

 

 

C)

 

Healthcare’s relationship to demand for health is not one-to-one.

 

 

D)

 

Demand for healthcare does not change with a person’s capacity to benefit from healthcare.

 

Question 13 (1 point)

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The point where price equals marginal cost is also known as which of the following?

 

Question 13 options:

 

A)

 

Technique efficiency

 

 

B)

 

Transaction efficiency

 

 

C)

 

Social efficiency

 

 

D)

 

Allocative efficiency

 

Question 14 (1 point)

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A table showing what quantity of good can be produced with different combinations of inputs of capital and labor is called:

 

Question 14 options:

 

A)

 

A production function

 

 

B)

 

A derived demand chart

 

 

C)

 

A supply curve

 

 

D)

 

A pricing model

 

Question 15 (1 point)

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Medicaid provides price subsidies that increase service utilization among low-income populations. Which of the following best describes the shape of the graph showing the relationship between income and healthcare utilization, on average?

 

Question 15 options:

 

A)

 

Has an inverted U-shape

 

 

B)

 

Has a U-shape

 

 

C)

 

Is positively sloped

 

 

D)

 

Is negatively sloped

 

Question 16 (1 point)

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In general, increasing spending on healthcare from $9,000 to $10,000 for an individual will have less of an impact than increasing spending from $2,000 to $3,000 for an individual. This example illustrates the economic principle of:

 

Question 16 options:

 

A)

 

Supply and demand

 

 

B)

 

Declining marginal productivity

 

 

C)

 

Comparative advantage

 

 

D)

 

Equilibrium at the margin

 

Question 17 (1 point)

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Which would you expect to be more elastic?

 

Question 17 options:

 

A)

 

The price elasticity of preventive services

 

 

B)

 

The price elasticity of emergency room services

 

Question 18 (1 point)

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For each of the scenarios in Q19–Q22, select the term that best indicates the kind of information problem described.

 

The inability of the insurance company to accurately assess how big of a risk some potential customers are means that the sickest customers buy plans that are not priced to cover the total cost of their care.

 

Question 18 options:

 

A)

 

Price discrimination

 

 

B)

 

Adverse selection

 

 

C)

 

Moral hazard

 

 

D)

 

Imperfect information

 

Question 19 (1 point)

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For each of the scenarios in Q19–Q22, select the term that best indicates the kind of information problem described.

 

A patient has a choice between three facilities for a knee replacement but information about the success rates of the procedure at each facility is not available.

 

Question 19 options:

 

A)

 

Price discrimination

 

 

B)

 

Adverse selection

 

 

C)

 

Moral hazard

 

 

D)

 

Imperfect information

 

Question 20 (1 point)

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For each of the scenarios in Q19–Q22, select the term that best indicates the kind of information problem described.

 

A patient who has a coinsurance rate of 20% consumes more healthcare than one with a coinsurance rate of 80%.

 

Question 20 options:

 

A)

 

Price discrimination

 

 

B)

 

Adverse selection

 

 

C)

 

Moral hazard

 

 

D)

 

Imperfect information

 

Question 21 (1 point)

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For each of the scenarios in Q19–Q22, select the term that best indicates the kind of information problem described.

 

People with health insurance pay lower rates for care than those without.

 

Question 21 options:

 

A)

 

Price discrimination

 

 

B)

 

Adverse selection

 

 

C)

 

Moral hazard

 

 

D)

 

Imperfect information

 

Question 22 (1 point)

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Which of the following would you expect to increase moral hazard?

 

Question 22 options:

 

A)

 

Implementing utilization review

 

 

B)

 

Decreasing deductibles

 

 

C)

 

Increasing co-pays

 

Question 23 (1 point)

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If the price of a cancer screening falls by 20% and the number of tests purchased rises by 30%. The demand for cancer screenings is:

 

Question 23 options:

 

A)

 

Price elastic

 

 

B)

 

Price inelastic

 

Question 24 (1 point)

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Which of the following is not a “cost” of medical care?

 

Question 24 options:

 

A)

 

The pain you feel from a doctor’s treatment

 

 

B)

 

The stigma you experience as a result of having a visible disease

 

 

C)

 

The time you spend in the waiting room

 

 

D)

 

The risk that you will be harmed by treatment

 

Question 25 (1 point)

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The PPACA (Patient Protection and Affordable Care Act) prohibits insurers from using many factors (e.g., blood pressure, family history) in determining premiums. Which of the following lists covers those factors which are allowed?

 

Question 25 options:

 

A)

 

Smoking status, family size, age, and geographic area

 

 

B)

 

Smoking status, gender, age, and sexual orientation

 

 

C)

 

Smoking status, family size, drug use, and age

 

 

D)

 

Smoking status, gender, age, and family size