D089 ECON 2000
Principles of Economics
Comprehensive OA Review (Qns & Ans)
2025
1. Which of the following best explains the concept of
opportunity cost in healthcare decision-making?
a) The monetary cost of acquiring medical equipment
b) The value of the next best alternative foregone when a choice
is made
c) The total revenue minus total expenses in a healthcare facility
d) The economic cost of implementing new health policies
©2024/2025
, ANS: b
Rationale: Opportunity cost is the value of the best alternative
that is not chosen, which is essential in resource allocation in the
healthcare sector.
2. A healthcare facility faced a sudden decrease in patients.
According to the law of demand, what might be a plausible reason
for this decrease?
a) Increase in healthcare workers' wages
b) Reduction in the facility's operating hours
c) Increase in the healthcare services prices offered
d) Improved health technology availability
ANS: c
Rationale: The law of demand states that, ceteris paribus, an
increase in price leads to a decrease in quantity demanded.
3. What type of market structure does a hospital operating in a
rural town most likely represent?
a) Perfect competition
b) Monopolistic competition
c) Monopoly
d) Oligopoly
©2024/2025
, ANS: c
Rationale: A monopoly is likely because the rural hospital
might be the sole provider in the area, limiting competition.
4. Which financial statement would best help a healthcare
administrator decide on long-term project investments?
a) Income statement
b) Cash flow statement
c) Balance sheet
d) Budget forecast
ANS: c
Rationale: The balance sheet provides information on the
assets, liabilities, and equity, indicating the financial strength and
capability for long-term investments.
5. Which factor is most crucial when considering the elasticity
of demand for healthcare services?
a) Substitutability of services
b) Price of healthcare inputs
c) Labor costs
d) Technological advancements
ANS: a
©2024/2025
, Rationale: Elasticity of demand largely depends on the
availability of substitutes or alternative services.
Fill-in-the-Blank Questions
6. The principle of __________ in economics suggests that
resources are limited.
ANS: Scarcity
Rationale: Scarcity refers to the finite nature of resources,
which is a fundamental concept in economics.
7. A policy aiming to reduce the healthcare costs by increasing
the efficiency of service delivery is an example of __________.
ANS: Supply-side economics
Rationale: Supply-side economics focuses on increasing
efficiency and output, often through incentives.
8. In economics, a __________ occurs when the quantity
demanded exceeds quantity supplied at the current price.
ANS: Shortage
Rationale: A shortage happens when demand outstrips supply,
often leading to higher prices or increased production.
©2024/2025
Principles of Economics
Comprehensive OA Review (Qns & Ans)
2025
1. Which of the following best explains the concept of
opportunity cost in healthcare decision-making?
a) The monetary cost of acquiring medical equipment
b) The value of the next best alternative foregone when a choice
is made
c) The total revenue minus total expenses in a healthcare facility
d) The economic cost of implementing new health policies
©2024/2025
, ANS: b
Rationale: Opportunity cost is the value of the best alternative
that is not chosen, which is essential in resource allocation in the
healthcare sector.
2. A healthcare facility faced a sudden decrease in patients.
According to the law of demand, what might be a plausible reason
for this decrease?
a) Increase in healthcare workers' wages
b) Reduction in the facility's operating hours
c) Increase in the healthcare services prices offered
d) Improved health technology availability
ANS: c
Rationale: The law of demand states that, ceteris paribus, an
increase in price leads to a decrease in quantity demanded.
3. What type of market structure does a hospital operating in a
rural town most likely represent?
a) Perfect competition
b) Monopolistic competition
c) Monopoly
d) Oligopoly
©2024/2025
, ANS: c
Rationale: A monopoly is likely because the rural hospital
might be the sole provider in the area, limiting competition.
4. Which financial statement would best help a healthcare
administrator decide on long-term project investments?
a) Income statement
b) Cash flow statement
c) Balance sheet
d) Budget forecast
ANS: c
Rationale: The balance sheet provides information on the
assets, liabilities, and equity, indicating the financial strength and
capability for long-term investments.
5. Which factor is most crucial when considering the elasticity
of demand for healthcare services?
a) Substitutability of services
b) Price of healthcare inputs
c) Labor costs
d) Technological advancements
ANS: a
©2024/2025
, Rationale: Elasticity of demand largely depends on the
availability of substitutes or alternative services.
Fill-in-the-Blank Questions
6. The principle of __________ in economics suggests that
resources are limited.
ANS: Scarcity
Rationale: Scarcity refers to the finite nature of resources,
which is a fundamental concept in economics.
7. A policy aiming to reduce the healthcare costs by increasing
the efficiency of service delivery is an example of __________.
ANS: Supply-side economics
Rationale: Supply-side economics focuses on increasing
efficiency and output, often through incentives.
8. In economics, a __________ occurs when the quantity
demanded exceeds quantity supplied at the current price.
ANS: Shortage
Rationale: A shortage happens when demand outstrips supply,
often leading to higher prices or increased production.
©2024/2025
