Question 1

Rationality implies that people will always make the correct choice.

Accepted Answer

A) True 
 B)False  False

Question 2

Cost-utility analysis assumes that life-years added due to a medical intervention are homogeneous.

Accepted Answer

A) True 
 B)False  False

Question 3

Which of the following is not a method used in constructing a health-utility index?

Accepted Answer

A)  rating scale 
B)  standard gamble 
C)  time trade-off 
D)  discounting 
E)  both b and d 
A)  rating scale 
B)  standard gamble 
C)  time trade-off 
D)  discounting 
E)  both b and d D

Question 4

Using the incremental cost-effectiveness ratio, if a new medical technology represents a positive net cost and negative net effect, then _______,

Accepted Answer

A)  the new medical technology dominates the old medical technology 
B)  the relative costs and benefits must be reviewed further 
C)  the old medical technology dominates the new medical technology 
D)  the discount rate utilized should be changed 
E)  a standard gamble should be utilized 
A)  the new medical technology dominates the old medical technology 
B)  the relative costs and benefits must be reviewed further 
C)  the old medical technology dominates the new medical technology 
D)  the discount rate utilized should be changed 
E)  a standard gamble should be utilized

Question 5

Failure to achieve the maximum total net societal benefit (TNSB) results in some amount of _______.

Accepted Answer

A)  deadweight loss 
B)  negative TNSB 
C)  increasing opportunity costs 
D)  unnecessary direct costs 
E)  diminishing marginal productivity 
A)  deadweight loss 
B)  negative TNSB 
C)  increasing opportunity costs 
D)  unnecessary direct costs 
E)  diminishing marginal productivity

Question 6

Lost wages due to a medical disability is an example of _______.

Accepted Answer

A)  direct medical care costs 
B)  direct nonmedical costs 
C)  indirect costs 
D)  deadweight loss 
E)  None of the above. 
A)  direct medical care costs 
B)  direct nonmedical costs 
C)  indirect costs 
D)  deadweight loss 
E)  None of the above.

Question 7

Which of the following is considered a shortcoming of the human capital approach?

Accepted Answer

A)  It includes nonmarket returns 
B)  It is used to estimate the value of a human life 
C)  It includes labor market imperfections 
D)  All of the above 
E)  None of the above 
A)  It includes nonmarket returns 
B)  It is used to estimate the value of a human life 
C)  It includes labor market imperfections 
D)  All of the above 
E)  None of the above

Question 8

Cost-effectiveness analysis is useful in deciding if public funds should be spent on military personnel or public health initiatives.

Accepted Answer

A) True 
 B)False

Question 9

Economists assume people behave rationally. If this were true, then the U.S. Surgeon General would only make decisions that benefit him/her financially.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is a limitation of cost-benefit analysis?

Accepted Answer

A)  Difficulty choosing the correct discount rate 
B)  Difficulty measuring the value of a human life 
C)  Difficulty measuring the dollar value of gains / losses in utility 
D)  Both a and c are correct 
E)  All of the above 
A)  Difficulty choosing the correct discount rate 
B)  Difficulty measuring the value of a human life 
C)  Difficulty measuring the dollar value of gains / losses in utility 
D)  Both a and c are correct 
E)  All of the above

Question 11

The use of a larger discount rate will result in a lower present value when estimating the costs and benefits of new medical technology.

Accepted Answer

A) True 
 B)False

Question 12

Money spent on transportation to a medical care provider is an example of _______.

Accepted Answer

A)  direct medical care costs 
B)  direct nonmedical costs 
C)  indirect costs 
D)  deadweight loss 
E)  None of the above. 
A)  direct medical care costs 
B)  direct nonmedical costs 
C)  indirect costs 
D)  deadweight loss 
E)  None of the above.

Question 13

Cost-effectiveness analysis assumes that _______.

Accepted Answer

A)  the outcome is desirable 
B)  the marginal benefit is greater than the marginal cost 
C)  resources are unlimited 
D)  there are no indirect costs 
E)  new technology is preferable to old technology 
A)  the outcome is desirable 
B)  the marginal benefit is greater than the marginal cost 
C)  resources are unlimited 
D)  there are no indirect costs 
E)  new technology is preferable to old technology

Question 14

Discounting involves _______ by (1 + r)t to obtain the _______ .

Accepted Answer

A)  dividing the present value; willingness to pay 
B)  multiplying the future value; present value 
C)  multiplying the present value; willingness to pay 
D)  dividing the future value; present value 
E)  dividing the future value; willingness to pay 
A)  dividing the present value; willingness to pay 
B)  multiplying the future value; present value 
C)  multiplying the present value; willingness to pay 
D)  dividing the future value; present value 
E)  dividing the future value; willingness to pay

Question 15

The _______ equates the value of a life to the market value of the output produced by an individual during his / her expected lifetime.

Accepted Answer

A)  willingness-to-pay approach 
B)  cost-benefit approach 
C)  cost-effectiveness approach 
D)  human capital approach 
E)  cost-utility approach 
A)  willingness-to-pay approach 
B)  cost-benefit approach 
C)  cost-effectiveness approach 
D)  human capital approach 
E)  cost-utility approach

Rationality implies that people will always make the correct choice.

Cost-utility analysis assumes that life-years added due to a medical intervention are homogeneous.

Which of the following is not a method used in constructing a health-utility index?

Using the incremental cost-effectiveness ratio, if a new medical technology represents a positive net cost and negative net effect, then _______,

Failure to achieve the maximum total net societal benefit (TNSB) results in some amount of _______.

Lost wages due to a medical disability is an example of _______.

Which of the following is considered a shortcoming of the human capital approach?

Cost-effectiveness analysis is useful in deciding if public funds should be spent on military personnel or public health initiatives.

Economists assume people behave rationally. If this were true, then the U.S. Surgeon General would only make decisions that benefit him/her financially.

Which of the following is a limitation of cost-benefit analysis?

The use of a larger discount rate will result in a lower present value when estimating the costs and benefits of new medical technology.

Money spent on transportation to a medical care provider is an example of _______.

Cost-effectiveness analysis assumes that _______.

Discounting involves _ by (1 + r)^t to obtain the _ .

The _______ equates the value of a life to the market value of the output produced by an individual during his / her expected lifetime.

Introduction

Health and Medical Care: an Economic Perspective

Health Care Systems and Institutions

The Demand for Medical Care

The Demand for Medical Insurance: Traditional and Managed Care Coverage

Medical Care Production and Costs

Structure, Conduct, Performance, and Market Analysis

Government, Health, and Medical Care

Government As Health Insurer

The Private Health Insurance Industry

The Physician Services Industry

The Hospital Services Industry

The Pharmaceutical Industry

The Long-Term Care Industry

Health Insurance Reform

Filters

Exam 3: Cost and Benefit Analysis

Rationality implies that people will always make the correct choice.

Cost-utility analysis assumes that life-years added due to a medical intervention are homogeneous.

Which of the following is not a method used in constructing a health-utility index?

Using the incremental cost-effectiveness ratio, if a new medical technology represents a positive net cost and negative net effect, then _______,

Failure to achieve the maximum total net societal benefit (TNSB) results in some amount of _______.

Lost wages due to a medical disability is an example of _______.

Which of the following is considered a shortcoming of the human capital approach?

Cost-effectiveness analysis is useful in deciding if public funds should be spent on military personnel or public health initiatives.

Economists assume people behave rationally. If this were true, then the U.S. Surgeon General would only make decisions that benefit him/her financially.

Which of the following is a limitation of cost-benefit analysis?

The use of a larger discount rate will result in a lower present value when estimating the costs and benefits of new medical technology.

Money spent on transportation to a medical care provider is an example of _______.

Cost-effectiveness analysis assumes that _______.

Discounting involves _______ by (1 + r)t to obtain the _______ .

The _______ equates the value of a life to the market value of the output produced by an individual during his / her expected lifetime.

Introduction

Health and Medical Care: an Economic Perspective

Health Care Systems and Institutions

The Demand for Medical Care

The Demand for Medical Insurance: Traditional and Managed Care Coverage

Medical Care Production and Costs

Structure, Conduct, Performance, and Market Analysis

Government, Health, and Medical Care

Government As Health Insurer

The Private Health Insurance Industry

The Physician Services Industry

The Hospital Services Industry

The Pharmaceutical Industry

The Long-Term Care Industry

Health Insurance Reform

Filters

Discounting involves _ by (1 + r)^t to obtain the _ .