MHA 706 HEALTHCARE ECONOMICS
EXAM 2026 ADVANCED REVIEW
PORTFOLIO FEATURING STRATEGIC
ANSWERS AND EXPERT INSIGHTS
⫸ Exhaust from a factory that increases health risks for people living
near the factory is an example of an externality. True or False.
Answer: True
⫸ In 2008 and 2009, the U.S. economy experienced a deep
economic downturn. If there is a short-run trade-off between inflation
and unemployment, to combat the high unemployment, President
Obama should have pursued an inflationary policy such as a stimulus
package of reduced taxes and increased government spending. True or
False. Answer: True
⫸ A society faces many decisions, but a household does not. True or
False. Answer: False
⫸ Public policies aimed at increasing the size of the economic pie
also lead to a higher degree of equality. True or False. Answer: False
⫸ You can stay home and study to do well on your exam or you can
go to the movies with your friends, but not both. This example
illustrates:
,A. Scarcity and tradeoffs
B. Scarcity but not tradeoffs
C. Tradeoffs but not scarcity
D. Neither tradeoffs nor scarcity Answer: A. Scarcity and tradeoffs
⫸ Your opportunity cost of going to a Maroon 5 concert during your
Spring Break is:
A. Zero, because Maroon 5 is your favorite
B. The price of the concert ticket
C. The price of the concert ticket plus the cost of any beverages you
buy at the concert
D. The price of the concert ticket, plus the cost of any beverages you
buy at the concert, and the value of your time Answer: D. The price of
the concert ticket, plus the cost of any beverages you buy at the
concert, and the value of your time
⫸ Certain employees are eligible for unemployment compensation if
they lose their jobs through no fault of their own. If Jim, a factory
worker, will receive compensation of half his regular pay for 52
weeks while he looks for a job, then:
A. The unemployment compensation most likely raises Jim's
incentive to save while he is working. Unemployment compensation
most likely increases Jim's efforts to find a new job.
B. The unemployment compensation most likely raises Jim's incentive
to save while he is working. Unemployment compensation most
likely decreases Jim's efforts to find a new job.
, C. The unemployment compensation most likely lowers Jim's
incentive to save while he is working. Unemployment compensation
most likely increases Jim's efforts to find a new job.
D. The unemployment compensation most likely lowers Jim's
incentive to save while he is working. Unemployment compensation
most likely decreases Jim's efforts Answer: D. The unemployment
compensation most likely lowers Jim's incentive to save while he is
working. Unemployment compensation most likely decreases Jim's
efforts to find a new job.
⫸ Micah has spent $30 for a taxi ride to attend a Colts game. When
he arrives at the stadium, he discovers that he left his ticket at home.
He doesn't have time to return home to get it. He paid $60 for his
ticket, but can buy another one for $80. In deciding whether he should
buy another ticket Micah should compare the value he places on
attending the game to:
A. $30
B. $80
C. $90
D. $170 Answer: B. $80
⫸ Trade between countries tends to:
A. Reduce specialization and make everyone better off
B. Reduce specialization and make everyone worse off
C. Raise specialization and make everyone better off
D. Raise specialization but make everyone worse off Answer: C.
Raise specialization and make everyone better off
EXAM 2026 ADVANCED REVIEW
PORTFOLIO FEATURING STRATEGIC
ANSWERS AND EXPERT INSIGHTS
⫸ Exhaust from a factory that increases health risks for people living
near the factory is an example of an externality. True or False.
Answer: True
⫸ In 2008 and 2009, the U.S. economy experienced a deep
economic downturn. If there is a short-run trade-off between inflation
and unemployment, to combat the high unemployment, President
Obama should have pursued an inflationary policy such as a stimulus
package of reduced taxes and increased government spending. True or
False. Answer: True
⫸ A society faces many decisions, but a household does not. True or
False. Answer: False
⫸ Public policies aimed at increasing the size of the economic pie
also lead to a higher degree of equality. True or False. Answer: False
⫸ You can stay home and study to do well on your exam or you can
go to the movies with your friends, but not both. This example
illustrates:
,A. Scarcity and tradeoffs
B. Scarcity but not tradeoffs
C. Tradeoffs but not scarcity
D. Neither tradeoffs nor scarcity Answer: A. Scarcity and tradeoffs
⫸ Your opportunity cost of going to a Maroon 5 concert during your
Spring Break is:
A. Zero, because Maroon 5 is your favorite
B. The price of the concert ticket
C. The price of the concert ticket plus the cost of any beverages you
buy at the concert
D. The price of the concert ticket, plus the cost of any beverages you
buy at the concert, and the value of your time Answer: D. The price of
the concert ticket, plus the cost of any beverages you buy at the
concert, and the value of your time
⫸ Certain employees are eligible for unemployment compensation if
they lose their jobs through no fault of their own. If Jim, a factory
worker, will receive compensation of half his regular pay for 52
weeks while he looks for a job, then:
A. The unemployment compensation most likely raises Jim's
incentive to save while he is working. Unemployment compensation
most likely increases Jim's efforts to find a new job.
B. The unemployment compensation most likely raises Jim's incentive
to save while he is working. Unemployment compensation most
likely decreases Jim's efforts to find a new job.
, C. The unemployment compensation most likely lowers Jim's
incentive to save while he is working. Unemployment compensation
most likely increases Jim's efforts to find a new job.
D. The unemployment compensation most likely lowers Jim's
incentive to save while he is working. Unemployment compensation
most likely decreases Jim's efforts Answer: D. The unemployment
compensation most likely lowers Jim's incentive to save while he is
working. Unemployment compensation most likely decreases Jim's
efforts to find a new job.
⫸ Micah has spent $30 for a taxi ride to attend a Colts game. When
he arrives at the stadium, he discovers that he left his ticket at home.
He doesn't have time to return home to get it. He paid $60 for his
ticket, but can buy another one for $80. In deciding whether he should
buy another ticket Micah should compare the value he places on
attending the game to:
A. $30
B. $80
C. $90
D. $170 Answer: B. $80
⫸ Trade between countries tends to:
A. Reduce specialization and make everyone better off
B. Reduce specialization and make everyone worse off
C. Raise specialization and make everyone better off
D. Raise specialization but make everyone worse off Answer: C.
Raise specialization and make everyone better off
