HCM320
Healthcare Economics
Comprehensive Midterms Test (Qns & Ans)
2025
1. What is the primary objective of healthcare economics?
a) Increase overall healthcare costs
b) Maximize patient satisfaction
c) Allocate resources efficiently
d) Expand healthcare facilities
Correct ANS: c) Allocate resources efficiently
Rationale: The objective of healthcare economics is to analyze
how healthcare resources are allocated to meet the needs of
patients effectively and efficiently.
©/2025
,2. In the context of healthcare economics, ‘opportunity cost’
refers to:
a) The cost incurred for treatments
b) The value of the next best alternative sacrificed
c) The total expenditure on healthcare
d) The profit gained from healthcare investments
Correct ANS: b) The value of the next best alternative
sacrificed
Rationale: Opportunity cost measures the benefits missed when
choosing one alternative over another.
3. Which of the following is a primary driver of healthcare
expenditures in the U.S.?
a) Technological advancements
b) Decreasing population size
c) Increased competition among providers
d) Lower patient enrollment
Correct ANS: a) Technological advancements
Rationale: Technological advancements lead to new treatments
and therapies that often drive up healthcare costs significantly.
©/2025
,4. What term is used to describe insurance policies that require
patients to pay a fixed percentage of the medical costs?
a) Capitation
b) Co-insurance
c) Deductible
d) Co-pay
Correct ANS: b) Co-insurance
Rationale: Co-insurance is a cost-sharing arrangement in which
the insured pays a percentage of the costs after the deductible is
met.
5. Which economic model emphasizes patient choice and
competition among providers to reduce costs?
a) Fee-for-service model
b) Consumer-driven healthcare
c) Accountable Care Organizations (ACOs)
d) Global budgeting
Correct ANS: b) Consumer-driven healthcare
Rationale: Consumer-driven healthcare empowers patients to
make informed decisions, leading to increased competition and
potentially lowering costs.
©/2025
, Fill-in-the-Blank Questions
6. The __________ Model suggests that patients should have
access to unlimited services without direct charges, funded
primarily through taxation.
Correct ANS: Beveridge
Rationale: The Beveridge Model is primarily funded through
general taxation and offers services free at the point of use.
7. In healthcare economics, the __________ of care refers to the
additional cost incurred for a marginal increase in patient care.
Correct ANS: marginal cost
Rationale: Marginal cost reflects the change in total costs that
result from producing one more unit of a service or care.
8. The concept of __________ refers to the trade-offs involved
when addressing competing healthcare priorities.
Correct ANS: scarcity
Rationale: Scarcity in healthcare means that resources are
limited, necessitating decisions about how best to allocate those
resources.
9. Medicare Part D is primarily focused on providing
__________ to seniors in the United States.
Correct ANS: prescription drug coverage
©/2025
Healthcare Economics
Comprehensive Midterms Test (Qns & Ans)
2025
1. What is the primary objective of healthcare economics?
a) Increase overall healthcare costs
b) Maximize patient satisfaction
c) Allocate resources efficiently
d) Expand healthcare facilities
Correct ANS: c) Allocate resources efficiently
Rationale: The objective of healthcare economics is to analyze
how healthcare resources are allocated to meet the needs of
patients effectively and efficiently.
©/2025
,2. In the context of healthcare economics, ‘opportunity cost’
refers to:
a) The cost incurred for treatments
b) The value of the next best alternative sacrificed
c) The total expenditure on healthcare
d) The profit gained from healthcare investments
Correct ANS: b) The value of the next best alternative
sacrificed
Rationale: Opportunity cost measures the benefits missed when
choosing one alternative over another.
3. Which of the following is a primary driver of healthcare
expenditures in the U.S.?
a) Technological advancements
b) Decreasing population size
c) Increased competition among providers
d) Lower patient enrollment
Correct ANS: a) Technological advancements
Rationale: Technological advancements lead to new treatments
and therapies that often drive up healthcare costs significantly.
©/2025
,4. What term is used to describe insurance policies that require
patients to pay a fixed percentage of the medical costs?
a) Capitation
b) Co-insurance
c) Deductible
d) Co-pay
Correct ANS: b) Co-insurance
Rationale: Co-insurance is a cost-sharing arrangement in which
the insured pays a percentage of the costs after the deductible is
met.
5. Which economic model emphasizes patient choice and
competition among providers to reduce costs?
a) Fee-for-service model
b) Consumer-driven healthcare
c) Accountable Care Organizations (ACOs)
d) Global budgeting
Correct ANS: b) Consumer-driven healthcare
Rationale: Consumer-driven healthcare empowers patients to
make informed decisions, leading to increased competition and
potentially lowering costs.
©/2025
, Fill-in-the-Blank Questions
6. The __________ Model suggests that patients should have
access to unlimited services without direct charges, funded
primarily through taxation.
Correct ANS: Beveridge
Rationale: The Beveridge Model is primarily funded through
general taxation and offers services free at the point of use.
7. In healthcare economics, the __________ of care refers to the
additional cost incurred for a marginal increase in patient care.
Correct ANS: marginal cost
Rationale: Marginal cost reflects the change in total costs that
result from producing one more unit of a service or care.
8. The concept of __________ refers to the trade-offs involved
when addressing competing healthcare priorities.
Correct ANS: scarcity
Rationale: Scarcity in healthcare means that resources are
limited, necessitating decisions about how best to allocate those
resources.
9. Medicare Part D is primarily focused on providing
__________ to seniors in the United States.
Correct ANS: prescription drug coverage
©/2025
