MHA 710 Exam 1 Questions And Verified Detailed Answers Latest
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What is "economics"? - ANSWER A Map for decision making. Economics analyzes the
allocation of scarce resources.
What are some of the specific difficulties managers face in healthcare? - ANSWER 1.
The central roles of risk and uncertainty
2. The complexities created by insurance
3. The perils produced by information asymmetries
4. The problems posed by not-for-profit organizations
5. The rapid and confusing course of technical and institutional change
Asymmetric information-asymmetric information refers to a situation in which one party
to a transaction has less information than the other party. For example, physicians and
other healthcare providers usually know patients' medical options better than patients
do. Because patients are often at a disadvantage in knowing their options, they may
accept recommendations for therapies that are not cost-effective. Alternatively,
acknowledging their vulnerability to physicians' self-serving advice, patients may resist
recommendations made in their best interest.
Adverse Selection - ANSWER A problem that occurs when buyers know more about the
product than the sellers do. For example, high-risk consumers are willing to pay more
for insurance than low-risk consumers are. (Any organization that cannot distinguish
between high-risk and low-risk consumers is unlikely to be profitable.)
, Problem of Scarcity - ANSWER There is more demand for a good or service than
availability
What do we mean by saying people are assumed to choose rationally? - ANSWER Tries
to explain behaviour of individuals acting in pursuit of best achievement of goals given
their resources.
What do we mean by saying resources are scarce? - ANSWER Anything useful in
consumption or production which has alternative uses
What is opportunity cost? - ANSWER Lost opportunity as a potential gain from an
unrealized profit. Missed opportunity due to the next best option being foregone.
What does "marginal" refer to? - ANSWER The examination of the costs and benefits
through a small change in the production of goods
What does efficiency refer to? - ANSWER No way to rearrange production of goods in a
way that makes one person more better off without making somebody else worse off.
How well an economy uses scare resources to meet the needs/wants of their customers
How do positive economic statements differ from normative economic statements? -
ANSWER Positive economics is objective while normative economics is subjective.
Facts/ What is vs What should be
How may economics be applied to the health sector? - ANSWER Describe, Explain,
Evaluate, Plan
As you read through the chapters, think about what characteristics the health sector
has that would make it such that the usual economic models may not work very well. -
ANSWER Social determinants of health, few insurance companies that providers rely
on, not a perfectly competitive market
How might health care products be both outputs and inputs? Give an example. -
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What is "economics"? - ANSWER A Map for decision making. Economics analyzes the
allocation of scarce resources.
What are some of the specific difficulties managers face in healthcare? - ANSWER 1.
The central roles of risk and uncertainty
2. The complexities created by insurance
3. The perils produced by information asymmetries
4. The problems posed by not-for-profit organizations
5. The rapid and confusing course of technical and institutional change
Asymmetric information-asymmetric information refers to a situation in which one party
to a transaction has less information than the other party. For example, physicians and
other healthcare providers usually know patients' medical options better than patients
do. Because patients are often at a disadvantage in knowing their options, they may
accept recommendations for therapies that are not cost-effective. Alternatively,
acknowledging their vulnerability to physicians' self-serving advice, patients may resist
recommendations made in their best interest.
Adverse Selection - ANSWER A problem that occurs when buyers know more about the
product than the sellers do. For example, high-risk consumers are willing to pay more
for insurance than low-risk consumers are. (Any organization that cannot distinguish
between high-risk and low-risk consumers is unlikely to be profitable.)
, Problem of Scarcity - ANSWER There is more demand for a good or service than
availability
What do we mean by saying people are assumed to choose rationally? - ANSWER Tries
to explain behaviour of individuals acting in pursuit of best achievement of goals given
their resources.
What do we mean by saying resources are scarce? - ANSWER Anything useful in
consumption or production which has alternative uses
What is opportunity cost? - ANSWER Lost opportunity as a potential gain from an
unrealized profit. Missed opportunity due to the next best option being foregone.
What does "marginal" refer to? - ANSWER The examination of the costs and benefits
through a small change in the production of goods
What does efficiency refer to? - ANSWER No way to rearrange production of goods in a
way that makes one person more better off without making somebody else worse off.
How well an economy uses scare resources to meet the needs/wants of their customers
How do positive economic statements differ from normative economic statements? -
ANSWER Positive economics is objective while normative economics is subjective.
Facts/ What is vs What should be
How may economics be applied to the health sector? - ANSWER Describe, Explain,
Evaluate, Plan
As you read through the chapters, think about what characteristics the health sector
has that would make it such that the usual economic models may not work very well. -
ANSWER Social determinants of health, few insurance companies that providers rely
on, not a perfectly competitive market
How might health care products be both outputs and inputs? Give an example. -
