WGU D219 – Healthcare Policy and
Economics Exam Questions With
Correct Answers (Verified Answers) Plus
Rationales| 2026/2027 Q&A | Instant
Download Pdf.
1. Which statement best describes the primary purpose of
healthcare policy?
A. To eliminate all healthcare costs
B. To ensure that every healthcare organization operates identically
C. To establish principles, rules, and actions that guide healthcare
delivery and outcomes
D. To replace clinical judgment with administrative decisions
Rationale: Healthcare policy establishes a framework for how
healthcare is financed, delivered, regulated, and evaluated. Policies can
be created by governments, organizations, professional groups, and
other stakeholders. Their purpose is not necessarily to eliminate costs or
standardize every organization, but to guide decisions and influence
healthcare outcomes.
2. Which economic concept refers to the limited availability of
resources relative to unlimited human wants?
A. Efficiency
B. Equity
,C. Incentive
D. Scarcity
Rationale: Scarcity is a fundamental economic principle. Healthcare
resources—including clinicians, hospital beds, medications, technology,
and funding—are limited, while the demand for healthcare services can
be extremely large. Because resources are scarce, healthcare
organizations and policymakers must make choices about how those
resources should be allocated.
3. A healthcare organization chooses to invest in preventive services
because they are expected to reduce expensive hospitalizations in
the future. Which economic principle is most directly
demonstrated?
A. Moral hazard
B. Opportunity cost
C. Price discrimination
D. Supply-induced demand
Rationale: Opportunity cost is the value of the next-best alternative that
must be forgone when a decision is made. By investing resources in
preventive services, the organization gives up the opportunity to use
those same resources elsewhere. Evaluating these trade-offs is central
to healthcare economic decision-making.
4. Which organization is primarily responsible for administering the
Medicare program?
A. Food and Drug Administration (FDA)
B. Department of Labor (DOL)
,C. Centers for Medicare & Medicaid Services (CMS)
D. Federal Trade Commission (FTC)
Rationale: CMS administers Medicare and works with states to
administer Medicaid and other public healthcare programs. The FDA
focuses primarily on regulating drugs, biologics, medical devices, food,
and related products rather than administering Medicare.
5. Which characteristic is most closely associated with a public good?
A. It is always purchased directly by consumers
B. It is generally nonexcludable and nonrivalrous
C. It must be provided exclusively by private businesses
D. It always generates a financial profit
Rationale: Public goods are generally characterized by nonexcludability
and nonrivalry. A classic healthcare-related example is population-level
disease surveillance or certain public health protections. One person's
benefit from such a service does not necessarily prevent others from
benefiting.
6. What is the primary economic purpose of insurance in healthcare?
A. To eliminate healthcare utilization
B. To guarantee that all providers receive identical reimbursement
C. To spread financial risk across a population
D. To prevent patients from making healthcare decisions
Rationale: Insurance pools financial risk among many individuals.
People contribute premiums or other payments to a risk pool, which is
then used to pay covered healthcare expenses for members who need
care. Insurance does not eliminate healthcare utilization or guarantee
identical reimbursement.
, 7. Which situation is the best example of moral hazard in
healthcare?
A. A hospital cannot find enough nurses to staff its units
B. A physician chooses a treatment based on clinical evidence
C. An insured patient uses more healthcare services because the
insurance plan pays most of the cost
D. A government establishes a healthcare quality standard
Rationale: Moral hazard occurs when insurance coverage changes an
individual's behavior because the individual does not bear the full
financial consequences of that behavior. In healthcare, comprehensive
coverage may sometimes encourage greater utilization because the
patient's out-of-pocket cost is reduced.
8. What does adverse selection mean in health insurance?
A. Providers refusing to treat insured patients
B. Higher-risk individuals being more likely to seek or maintain
insurance coverage than lower-risk individuals
C. Insurers paying providers more than the billed amount
D. Patients selecting healthcare providers based solely on quality
Rationale: Adverse selection occurs when individuals with greater
expected healthcare needs are disproportionately represented in an
insurance pool. If healthier individuals avoid coverage while higher-risk
individuals enroll, the average cost of the insurance pool can increase
substantially.
9. Which healthcare financing mechanism involves a fixed amount
paid to a provider for each enrolled patient during a specified
period, regardless of the number of services provided?
Economics Exam Questions With
Correct Answers (Verified Answers) Plus
Rationales| 2026/2027 Q&A | Instant
Download Pdf.
1. Which statement best describes the primary purpose of
healthcare policy?
A. To eliminate all healthcare costs
B. To ensure that every healthcare organization operates identically
C. To establish principles, rules, and actions that guide healthcare
delivery and outcomes
D. To replace clinical judgment with administrative decisions
Rationale: Healthcare policy establishes a framework for how
healthcare is financed, delivered, regulated, and evaluated. Policies can
be created by governments, organizations, professional groups, and
other stakeholders. Their purpose is not necessarily to eliminate costs or
standardize every organization, but to guide decisions and influence
healthcare outcomes.
2. Which economic concept refers to the limited availability of
resources relative to unlimited human wants?
A. Efficiency
B. Equity
,C. Incentive
D. Scarcity
Rationale: Scarcity is a fundamental economic principle. Healthcare
resources—including clinicians, hospital beds, medications, technology,
and funding—are limited, while the demand for healthcare services can
be extremely large. Because resources are scarce, healthcare
organizations and policymakers must make choices about how those
resources should be allocated.
3. A healthcare organization chooses to invest in preventive services
because they are expected to reduce expensive hospitalizations in
the future. Which economic principle is most directly
demonstrated?
A. Moral hazard
B. Opportunity cost
C. Price discrimination
D. Supply-induced demand
Rationale: Opportunity cost is the value of the next-best alternative that
must be forgone when a decision is made. By investing resources in
preventive services, the organization gives up the opportunity to use
those same resources elsewhere. Evaluating these trade-offs is central
to healthcare economic decision-making.
4. Which organization is primarily responsible for administering the
Medicare program?
A. Food and Drug Administration (FDA)
B. Department of Labor (DOL)
,C. Centers for Medicare & Medicaid Services (CMS)
D. Federal Trade Commission (FTC)
Rationale: CMS administers Medicare and works with states to
administer Medicaid and other public healthcare programs. The FDA
focuses primarily on regulating drugs, biologics, medical devices, food,
and related products rather than administering Medicare.
5. Which characteristic is most closely associated with a public good?
A. It is always purchased directly by consumers
B. It is generally nonexcludable and nonrivalrous
C. It must be provided exclusively by private businesses
D. It always generates a financial profit
Rationale: Public goods are generally characterized by nonexcludability
and nonrivalry. A classic healthcare-related example is population-level
disease surveillance or certain public health protections. One person's
benefit from such a service does not necessarily prevent others from
benefiting.
6. What is the primary economic purpose of insurance in healthcare?
A. To eliminate healthcare utilization
B. To guarantee that all providers receive identical reimbursement
C. To spread financial risk across a population
D. To prevent patients from making healthcare decisions
Rationale: Insurance pools financial risk among many individuals.
People contribute premiums or other payments to a risk pool, which is
then used to pay covered healthcare expenses for members who need
care. Insurance does not eliminate healthcare utilization or guarantee
identical reimbursement.
, 7. Which situation is the best example of moral hazard in
healthcare?
A. A hospital cannot find enough nurses to staff its units
B. A physician chooses a treatment based on clinical evidence
C. An insured patient uses more healthcare services because the
insurance plan pays most of the cost
D. A government establishes a healthcare quality standard
Rationale: Moral hazard occurs when insurance coverage changes an
individual's behavior because the individual does not bear the full
financial consequences of that behavior. In healthcare, comprehensive
coverage may sometimes encourage greater utilization because the
patient's out-of-pocket cost is reduced.
8. What does adverse selection mean in health insurance?
A. Providers refusing to treat insured patients
B. Higher-risk individuals being more likely to seek or maintain
insurance coverage than lower-risk individuals
C. Insurers paying providers more than the billed amount
D. Patients selecting healthcare providers based solely on quality
Rationale: Adverse selection occurs when individuals with greater
expected healthcare needs are disproportionately represented in an
insurance pool. If healthier individuals avoid coverage while higher-risk
individuals enroll, the average cost of the insurance pool can increase
substantially.
9. Which healthcare financing mechanism involves a fixed amount
paid to a provider for each enrolled patient during a specified
period, regardless of the number of services provided?
