HSA 4430
Health Economics
Midterms Exam Review (Qns & Ans)
2025
1. Which of the following best defines the concept of
"opportunity cost" in health economics?
- A. The monetary cost of a health intervention
- B. The value of the next best alternative forgone
- C. The total cost of all possible health interventions
- D. The financial gain from a health intervention
- ANS: B. The value of the next best alternative forgone
- Rationale: Opportunity cost refers to the value of the best
alternative that is forgone when a choice is made.
©2025
,2. What is the primary objective of cost-effectiveness analysis in
health economics?
- A. To maximize health care expenditures
- B. To compare the relative costs and outcomes of different
health interventions
- C. To increase the prices of medical services
- D. To reduce patient access to care
- ANS: B. To compare the relative costs and outcomes of
different health interventions
- Rationale: Cost-effectiveness analysis evaluates the costs
and health outcomes of different interventions to determine the
most efficient use of resources.
3. Which type of market structure is characterized by a large
number of firms producing differentiated products in health care?
- A. Perfect competition
- B. Monopoly
- C. Oligopoly
- D. Monopolistic competition
- ANS: D. Monopolistic competition
©2025
, - Rationale: Monopolistic competition involves many firms
producing similar but not identical products, allowing for product
differentiation.
4. What is the primary purpose of a health technology
assessment (HTA)?
- A. To regulate health care prices
- B. To evaluate the clinical effectiveness and cost-effectiveness
of health technologies
- C. To increase the number of medical errors
- D. To limit patient access to new treatments
- ANS: B. To evaluate the clinical effectiveness and cost-
effectiveness of health technologies
- Rationale: HTA assesses the value of health technologies in
terms of their clinical benefits and economic impact.
5. Which of the following is a measure of the financial burden of
illness on patients and their families?
- A. Cost-utility analysis
- B. Catastrophic health expenditure
- C. Incremental cost-effectiveness ratio
- D. Health-related quality of life
- ANS: B. Catastrophic health expenditure
©2025
, - Rationale: Catastrophic health expenditure occurs when
health care costs exceed a substantial proportion of a household's
income, imposing a significant financial burden.
Fill-in-the-Blank Questions
6. __________ is an economic evaluation method that compares
the cost of an intervention to the amount of health benefit it
produces, often measured in quality-adjusted life years (QALYs).
- ANS: Cost-utility analysis
- Rationale: Cost-utility analysis compares costs to health
benefits, typically using QALYs as the measure of health
outcomes.
7. The __________ is a tool used to measure the burden of
disease by combining morbidity and mortality into a single
metric.
- ANS: Disability-adjusted life year (DALY)
- Rationale: DALYs combine years of life lost due to
premature death and years lived with disability to quantify the
burden of disease.
8. __________ is a payment model where providers are
reimbursed a fixed amount for each patient assigned to them,
regardless of the number of services provided.
- ANS: Capitation
©2025
Health Economics
Midterms Exam Review (Qns & Ans)
2025
1. Which of the following best defines the concept of
"opportunity cost" in health economics?
- A. The monetary cost of a health intervention
- B. The value of the next best alternative forgone
- C. The total cost of all possible health interventions
- D. The financial gain from a health intervention
- ANS: B. The value of the next best alternative forgone
- Rationale: Opportunity cost refers to the value of the best
alternative that is forgone when a choice is made.
©2025
,2. What is the primary objective of cost-effectiveness analysis in
health economics?
- A. To maximize health care expenditures
- B. To compare the relative costs and outcomes of different
health interventions
- C. To increase the prices of medical services
- D. To reduce patient access to care
- ANS: B. To compare the relative costs and outcomes of
different health interventions
- Rationale: Cost-effectiveness analysis evaluates the costs
and health outcomes of different interventions to determine the
most efficient use of resources.
3. Which type of market structure is characterized by a large
number of firms producing differentiated products in health care?
- A. Perfect competition
- B. Monopoly
- C. Oligopoly
- D. Monopolistic competition
- ANS: D. Monopolistic competition
©2025
, - Rationale: Monopolistic competition involves many firms
producing similar but not identical products, allowing for product
differentiation.
4. What is the primary purpose of a health technology
assessment (HTA)?
- A. To regulate health care prices
- B. To evaluate the clinical effectiveness and cost-effectiveness
of health technologies
- C. To increase the number of medical errors
- D. To limit patient access to new treatments
- ANS: B. To evaluate the clinical effectiveness and cost-
effectiveness of health technologies
- Rationale: HTA assesses the value of health technologies in
terms of their clinical benefits and economic impact.
5. Which of the following is a measure of the financial burden of
illness on patients and their families?
- A. Cost-utility analysis
- B. Catastrophic health expenditure
- C. Incremental cost-effectiveness ratio
- D. Health-related quality of life
- ANS: B. Catastrophic health expenditure
©2025
, - Rationale: Catastrophic health expenditure occurs when
health care costs exceed a substantial proportion of a household's
income, imposing a significant financial burden.
Fill-in-the-Blank Questions
6. __________ is an economic evaluation method that compares
the cost of an intervention to the amount of health benefit it
produces, often measured in quality-adjusted life years (QALYs).
- ANS: Cost-utility analysis
- Rationale: Cost-utility analysis compares costs to health
benefits, typically using QALYs as the measure of health
outcomes.
7. The __________ is a tool used to measure the burden of
disease by combining morbidity and mortality into a single
metric.
- ANS: Disability-adjusted life year (DALY)
- Rationale: DALYs combine years of life lost due to
premature death and years lived with disability to quantify the
burden of disease.
8. __________ is a payment model where providers are
reimbursed a fixed amount for each patient assigned to them,
regardless of the number of services provided.
- ANS: Capitation
©2025
