HCM320
Healthcare Economics
Comprehensive Test Review (Qns & Ans)
2025
1. Which of the following BEST describes the concept of
"opportunity cost" in healthcare?
a) The cost of a service that is directly paid to providers
b) The lost benefit of the best alternative service when making a
healthcare decision
c) The total expenditure for healthcare in a region
©/2025
, d) The fixed costs divided by the number of patients served
Correct ANS: b
Rationale: Opportunity cost reflects the value of the next best
alternative forgone when a healthcare decision is made.
2. What is the primary focus of health economics?
a) Improving clinical outcomes
b) Efficient resource allocation in healthcare
c) Increasing healthcare costs
d) Regulatory compliance
Correct ANS: b
Rationale: Health economics analyzes how resources are
allocated and utilized in healthcare to maximize efficiency and
effectiveness.
3. In the context of health resource allocation, what does 'Pareto
efficiency' imply?
a) Resources are distributed equally among all patients
b) No patient can be made better off without making another
worse off
c) All patients receive the same level of care
©/2025
, d) Healthcare providers are paid equally irrespective of services
rendered
Correct ANS: b
Rationale: Pareto efficiency indicates that resources are
allocated in a way that maximizes total benefits without
disadvantaging any other parties.
4. Which of the following is NOT a method of cost-effectiveness
analysis in healthcare?
a) Incremental Cost-Effectiveness Ratio (ICER)
b) Quality Adjusted Life Years (QALYs)
c) Discounted Cash Flow Analysis
d) Net Present Value (NPV)
Correct ANS: d
Rationale: While NPV is a financial analysis method, it is not
specific for cost-effectiveness analysis in healthcare.
5. What economic evaluation method compares the relative costs
and outcomes of different interventions?
a) Cost-benefit analysis
b) Cost-utility analysis
c) Cost-effectiveness analysis
©/2025
, d) Cost-minimization analysis
Correct ANS: c
Rationale: Cost-effectiveness analysis evaluates the costs
relative to the outcomes to decide which intervention provides the
best value.
Fill-in-the-Blank Questions
6. The concept of __________ refers to the total costs incurred
to provide a service, including both direct and indirect costs.
Correct ANS: “total economic cost”
Rationale: Total economic cost encompasses all incurred
expenses associated with a healthcare service.
7. In healthcare economics, the matrix of __________ is used to
represent choices and outcomes in complex decisions.
Correct ANS: “decision analysis”
Rationale: Decision analysis matrices help visualize different
courses of action and their potential outcomes.
8. The __________ of a healthcare service refers to the added
benefit derived from its use compared to another service.
Correct ANS: “marginal utility”
©/2025
Healthcare Economics
Comprehensive Test Review (Qns & Ans)
2025
1. Which of the following BEST describes the concept of
"opportunity cost" in healthcare?
a) The cost of a service that is directly paid to providers
b) The lost benefit of the best alternative service when making a
healthcare decision
c) The total expenditure for healthcare in a region
©/2025
, d) The fixed costs divided by the number of patients served
Correct ANS: b
Rationale: Opportunity cost reflects the value of the next best
alternative forgone when a healthcare decision is made.
2. What is the primary focus of health economics?
a) Improving clinical outcomes
b) Efficient resource allocation in healthcare
c) Increasing healthcare costs
d) Regulatory compliance
Correct ANS: b
Rationale: Health economics analyzes how resources are
allocated and utilized in healthcare to maximize efficiency and
effectiveness.
3. In the context of health resource allocation, what does 'Pareto
efficiency' imply?
a) Resources are distributed equally among all patients
b) No patient can be made better off without making another
worse off
c) All patients receive the same level of care
©/2025
, d) Healthcare providers are paid equally irrespective of services
rendered
Correct ANS: b
Rationale: Pareto efficiency indicates that resources are
allocated in a way that maximizes total benefits without
disadvantaging any other parties.
4. Which of the following is NOT a method of cost-effectiveness
analysis in healthcare?
a) Incremental Cost-Effectiveness Ratio (ICER)
b) Quality Adjusted Life Years (QALYs)
c) Discounted Cash Flow Analysis
d) Net Present Value (NPV)
Correct ANS: d
Rationale: While NPV is a financial analysis method, it is not
specific for cost-effectiveness analysis in healthcare.
5. What economic evaluation method compares the relative costs
and outcomes of different interventions?
a) Cost-benefit analysis
b) Cost-utility analysis
c) Cost-effectiveness analysis
©/2025
, d) Cost-minimization analysis
Correct ANS: c
Rationale: Cost-effectiveness analysis evaluates the costs
relative to the outcomes to decide which intervention provides the
best value.
Fill-in-the-Blank Questions
6. The concept of __________ refers to the total costs incurred
to provide a service, including both direct and indirect costs.
Correct ANS: “total economic cost”
Rationale: Total economic cost encompasses all incurred
expenses associated with a healthcare service.
7. In healthcare economics, the matrix of __________ is used to
represent choices and outcomes in complex decisions.
Correct ANS: “decision analysis”
Rationale: Decision analysis matrices help visualize different
courses of action and their potential outcomes.
8. The __________ of a healthcare service refers to the added
benefit derived from its use compared to another service.
Correct ANS: “marginal utility”
©/2025
