MHA 710 Exam 1 | Questions with 100% Correct ANSWERS
| Verified | Latest Update 2026
What is "economics"? - ANSWERS💫✔️-A Map for decision making. Economics analyzes the allocation
of scarce resources.
What are some of the specific challenges faced by managers in healthcare? - ANSWERS💫✔️-1. The
central roles of risk and uncertainty
2. The complexities created by insurance
3. The perils produced by information asymmetries
4. The problems posed by not-for-profit organizations
5. The rapid and confusing course of technical and institutional change
What does asymmetric information mean? Can you give an example? - ANSWERS💫✔️-When one
party in a transaction has less information than the other party. For example, physicians and other
healthcare providers usually understand patients' medical options better than patients do. Unaware
of their choices, patients may accept recommendations for therapies that are not cost-effective or,
recognizing their vulnerability to physicians' self-serving advice, may resist recommendations made in
their best interest.
What is adverse selection? - ANSWERS💫✔️-A situation that occurs when buyers have better
information than sellers. For example, high-risk consumers are willing to pay more for insurance than
low-risk consumers are. (Organizations that have difficulty distinguishing high-risk from low-risk
consumers are unlikely to be profitable.)
What is the problem of scarcity? - ANSWERS💫✔️-Demand for a good or service is greater than the
availability
, What does it mean to say people are assumed to make choices rationally? - ANSWERS💫✔️-focuses on
individuals' efforts to best realize their goals, given their resources.
What does it mean to says resources are scarce? - ANSWERS💫✔️-Anything useful in consumption or
production that has alternative uses.
What is opportunity cost? - ANSWERS💫✔️-Potential loss from a missed opportunity. Passing up the
next best choice.
What does "marginal" refer to? - ANSWERS💫✔️-The examination of the costs and benefits through a
small change in the production of goods
What does efficiency refer to? - ANSWERS💫✔️-No way to rearrange production of goods in a way
that makes one person more better off without making somebody else worse off. How well an
economy uses scare resources to meet the needs/wants of their customers
How do positive economic statements differ from normative economic statements? - ANSWERS💫✔️-
Positive economics is objective while normative economics is subjective. Facts/ What is vs What
should be
How can economics be applied to the health sector? - ANSWERS💫✔️-Describe, Explain, Evaluate, Plan
As we progress through the chapters, think about the special characteristics that apply to the health
sector that might limit the applicability of traditional economic models. - ANSWERS💫✔️-Social
determinants of health, few insurance companies that providers rely on, not a perfectly competitive
market
How are healthcare products both outputs and inputs? Can you give an example? - ANSWERS💫✔️-
Products (goods and services are considered products) are commonly both inputs and outputs. For
example, a surgical tool is an input into a surgery and an output of a surgical tool company. Similarly,
the surgery itself can be considered an output of the surgical team or an input into the health of the
patient.
| Verified | Latest Update 2026
What is "economics"? - ANSWERS💫✔️-A Map for decision making. Economics analyzes the allocation
of scarce resources.
What are some of the specific challenges faced by managers in healthcare? - ANSWERS💫✔️-1. The
central roles of risk and uncertainty
2. The complexities created by insurance
3. The perils produced by information asymmetries
4. The problems posed by not-for-profit organizations
5. The rapid and confusing course of technical and institutional change
What does asymmetric information mean? Can you give an example? - ANSWERS💫✔️-When one
party in a transaction has less information than the other party. For example, physicians and other
healthcare providers usually understand patients' medical options better than patients do. Unaware
of their choices, patients may accept recommendations for therapies that are not cost-effective or,
recognizing their vulnerability to physicians' self-serving advice, may resist recommendations made in
their best interest.
What is adverse selection? - ANSWERS💫✔️-A situation that occurs when buyers have better
information than sellers. For example, high-risk consumers are willing to pay more for insurance than
low-risk consumers are. (Organizations that have difficulty distinguishing high-risk from low-risk
consumers are unlikely to be profitable.)
What is the problem of scarcity? - ANSWERS💫✔️-Demand for a good or service is greater than the
availability
, What does it mean to say people are assumed to make choices rationally? - ANSWERS💫✔️-focuses on
individuals' efforts to best realize their goals, given their resources.
What does it mean to says resources are scarce? - ANSWERS💫✔️-Anything useful in consumption or
production that has alternative uses.
What is opportunity cost? - ANSWERS💫✔️-Potential loss from a missed opportunity. Passing up the
next best choice.
What does "marginal" refer to? - ANSWERS💫✔️-The examination of the costs and benefits through a
small change in the production of goods
What does efficiency refer to? - ANSWERS💫✔️-No way to rearrange production of goods in a way
that makes one person more better off without making somebody else worse off. How well an
economy uses scare resources to meet the needs/wants of their customers
How do positive economic statements differ from normative economic statements? - ANSWERS💫✔️-
Positive economics is objective while normative economics is subjective. Facts/ What is vs What
should be
How can economics be applied to the health sector? - ANSWERS💫✔️-Describe, Explain, Evaluate, Plan
As we progress through the chapters, think about the special characteristics that apply to the health
sector that might limit the applicability of traditional economic models. - ANSWERS💫✔️-Social
determinants of health, few insurance companies that providers rely on, not a perfectly competitive
market
How are healthcare products both outputs and inputs? Can you give an example? - ANSWERS💫✔️-
Products (goods and services are considered products) are commonly both inputs and outputs. For
example, a surgical tool is an input into a surgery and an output of a surgical tool company. Similarly,
the surgery itself can be considered an output of the surgical team or an input into the health of the
patient.
