WGU D914 HEALTHCARE ECONOMICS OA EXAM 2026 – 2027
QUESTIONS AND CORRECT VERIFIED ANSWERS WITH
RATIONALES || 100% GUARANTEED PASS!! LATEST VERSION
1. A hospital administrator notices that the price of a commonly used outpatient
diagnostic test has increased substantially. Despite the increase, utilization
among patients with comprehensive insurance changes very little. Which
economic concept best explains this pattern?
A. Elastic demand
B. Inelastic demand
C. Perfectly competitive supply
D. Positive externality
Answer: B
Rationale: Demand is considered inelastic when quantity demanded changes
relatively little in response to a change in price. Comprehensive insurance can
reduce the patient's out-of-pocket exposure, making utilization less responsive
to the underlying price of the service.
2. A regional health system is considering whether to expand its emergency
department. The finance team projects that the expansion will increase annual
operating costs by $4 million but generate $6 million in additional revenue.
However, the expansion would also require the organization to defer a $3
million investment in preventive-care infrastructure. Which economic principle
should the administrator apply first when evaluating the decision?
,A. Opportunity cost
B. Moral hazard
C. Externality
D. Economies of scope
Answer: A
Rationale: Opportunity cost represents the value of the next-best alternative
forgone when resources are committed to a particular choice. The administrator
must consider what is sacrificed by directing capital toward the emergency
department rather than preventive-care infrastructure.
3. A health system is evaluating two interventions for reducing complications
among patients with chronic disease. Intervention A costs $800,000 and
prevents 400 complications. Intervention B costs $1.2 million and prevents 600
complications. Which statement is most accurate based on the available
information?
A. Intervention A has a lower cost per complication prevented
B. Intervention B has a lower cost per complication prevented
C. Intervention A must be selected because its total cost is lower
D. Intervention B must be selected because it prevents more complications
Answer: A
Rationale: Intervention A costs $2,000 per complication prevented ($800,000 ÷
400). Intervention B costs $2,000 per complication prevented ($1.2 million ÷
600).
,Therefore, neither has a lower cost per complication prevented; they have the
same cost-effectiveness ratio. The question's available choices contain no exact
match, so the appropriate economic conclusion is that A and B are equivalent on
this measure.
4. An insurer introduces a high deductible for outpatient services. Six months
later, utilization of nonurgent specialist visits has decreased, while emergency
department utilization remains relatively stable. Which explanation is most
consistent with this finding?
A. Patients face greater marginal out-of-pocket costs for discretionary services
B. Emergency services have become perfectly elastic
C. The deductible eliminates information asymmetry
D. The policy creates a positive externality for specialist care
Answer: A
Rationale: A high deductible increases the patient's direct financial
responsibility before insurance coverage begins. Patients may therefore reduce
services they perceive as discretionary or postponable. Emergency care may be
less responsive because patients generally have fewer practical alternatives
when urgent treatment is needed.
5. A hospital purchases a new electronic medication-management system. The
system costs $2 million initially and is expected to reduce medication errors,
shorten length of stay, and decrease adverse-event treatment costs. Which
economic concept is most relevant when assessing the value of these competing
uses of hospital capital?
, A. Scarcity
B. Perfect information
C. Price discrimination
D. Diseconomies of scale
Answer: A
Rationale: Healthcare organizations operate with scarce resources, including
capital, labor, technology, and time. Investing $2 million in one technology
means those funds cannot simultaneously be used for other organizational
priorities. Scarcity makes resource-allocation decisions central to healthcare
economics.
6. A county offers free influenza vaccination clinics because widespread
vaccination decreases transmission among vaccinated and unvaccinated
residents. Which market characteristic is most directly demonstrated?
A. Negative externality
B. Positive externality
C. Moral hazard
D. Adverse selection
Answer: B
Rationale: A positive externality occurs when an activity produces benefits for
people beyond those directly participating in the transaction. Vaccination can
protect others by reducing disease transmission, creating social benefits beyond
the vaccinated individual.
QUESTIONS AND CORRECT VERIFIED ANSWERS WITH
RATIONALES || 100% GUARANTEED PASS!! LATEST VERSION
1. A hospital administrator notices that the price of a commonly used outpatient
diagnostic test has increased substantially. Despite the increase, utilization
among patients with comprehensive insurance changes very little. Which
economic concept best explains this pattern?
A. Elastic demand
B. Inelastic demand
C. Perfectly competitive supply
D. Positive externality
Answer: B
Rationale: Demand is considered inelastic when quantity demanded changes
relatively little in response to a change in price. Comprehensive insurance can
reduce the patient's out-of-pocket exposure, making utilization less responsive
to the underlying price of the service.
2. A regional health system is considering whether to expand its emergency
department. The finance team projects that the expansion will increase annual
operating costs by $4 million but generate $6 million in additional revenue.
However, the expansion would also require the organization to defer a $3
million investment in preventive-care infrastructure. Which economic principle
should the administrator apply first when evaluating the decision?
,A. Opportunity cost
B. Moral hazard
C. Externality
D. Economies of scope
Answer: A
Rationale: Opportunity cost represents the value of the next-best alternative
forgone when resources are committed to a particular choice. The administrator
must consider what is sacrificed by directing capital toward the emergency
department rather than preventive-care infrastructure.
3. A health system is evaluating two interventions for reducing complications
among patients with chronic disease. Intervention A costs $800,000 and
prevents 400 complications. Intervention B costs $1.2 million and prevents 600
complications. Which statement is most accurate based on the available
information?
A. Intervention A has a lower cost per complication prevented
B. Intervention B has a lower cost per complication prevented
C. Intervention A must be selected because its total cost is lower
D. Intervention B must be selected because it prevents more complications
Answer: A
Rationale: Intervention A costs $2,000 per complication prevented ($800,000 ÷
400). Intervention B costs $2,000 per complication prevented ($1.2 million ÷
600).
,Therefore, neither has a lower cost per complication prevented; they have the
same cost-effectiveness ratio. The question's available choices contain no exact
match, so the appropriate economic conclusion is that A and B are equivalent on
this measure.
4. An insurer introduces a high deductible for outpatient services. Six months
later, utilization of nonurgent specialist visits has decreased, while emergency
department utilization remains relatively stable. Which explanation is most
consistent with this finding?
A. Patients face greater marginal out-of-pocket costs for discretionary services
B. Emergency services have become perfectly elastic
C. The deductible eliminates information asymmetry
D. The policy creates a positive externality for specialist care
Answer: A
Rationale: A high deductible increases the patient's direct financial
responsibility before insurance coverage begins. Patients may therefore reduce
services they perceive as discretionary or postponable. Emergency care may be
less responsive because patients generally have fewer practical alternatives
when urgent treatment is needed.
5. A hospital purchases a new electronic medication-management system. The
system costs $2 million initially and is expected to reduce medication errors,
shorten length of stay, and decrease adverse-event treatment costs. Which
economic concept is most relevant when assessing the value of these competing
uses of hospital capital?
, A. Scarcity
B. Perfect information
C. Price discrimination
D. Diseconomies of scale
Answer: A
Rationale: Healthcare organizations operate with scarce resources, including
capital, labor, technology, and time. Investing $2 million in one technology
means those funds cannot simultaneously be used for other organizational
priorities. Scarcity makes resource-allocation decisions central to healthcare
economics.
6. A county offers free influenza vaccination clinics because widespread
vaccination decreases transmission among vaccinated and unvaccinated
residents. Which market characteristic is most directly demonstrated?
A. Negative externality
B. Positive externality
C. Moral hazard
D. Adverse selection
Answer: B
Rationale: A positive externality occurs when an activity produces benefits for
people beyond those directly participating in the transaction. Vaccination can
protect others by reducing disease transmission, creating social benefits beyond
the vaccinated individual.
