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 PRACTICE BOOK» NOT FOR SALE
Contents

1 HEALTH ECONOMICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 HEALTH ECONOMICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
 1. HEALTH ECONOMICS

NARAYAN CHANGDER
1.1 HEALTH ECONOMICS
1. What is the term for a plot of a curve 4. Factors that affect the supply of health
showing the combinations of inputs that manpower, EXCEPT
can be bought for a sum of money?
A. Technology
A. Costquant curve
B. Isocost curve B. Number of Working hours

C. Non-linear production function C. Money

D. Isoquant curve D. Health insurance plans
2. In economics, what brings together the de-
mand for goods from consumers and the 5. Inferior goods are those for which demand
supply of those goods from suppliers? increases as
A. Company A. Income decreases
B. Government
B. Income increases
C. Market
C. The price of a substitute rises
D. Bank
D. The price of a substitute falls
3. What is a key strategy to increase effi-
ciency in healthcare?
6. What is the main signal to both consumers
A. Ignore evidence in decisions by care
and suppliers in a market according to price
givers and patients
theory?
B. Improve evaluation of technologies,
care strategies, and providers A. Quantity
C. Eliminate value-based competition for B. Brand
health care dollars
C. Quality
D. Deploy engineering methods to in-
crease variability D. Price

1. B 2. C 3. B 4. C 5. A 6. D 7. B
1.1 HEALTH ECONOMICS 3

7. What is the concept of scarcity in eco- 12. What is the definition of Economics?
nomics? A. The study of human behavior in re-

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A. Unlimited resources to fulfill unlimited sponse to having limited resources
wants and needs B. The study of how to fulfill unlimited
B. Limited resources to fulfill unlimited wants and needs with limited resources
wants and needs C. The study of human behavior in re-
C. Unlimited resources to fulfill limited sponse to having unlimited resources
wants and needs D. The study of how to fulfill unlimited
D. Limited resources to fulfill limited wants and needs with unlimited resources
wants and needs
13. What is the term used to describe goods
and services for which economic analysis
8. How non-monetary consequences are
is deemed to be relevant?
transformed into monetary units
A. Economic goods
A. With willingness to pay
B. Consumer goods
B. With the discount rate
C. Luxury goods
C. With market prices
D. Necessities
D. With an internet auction
14. Should the prospect of family members be
9. What is one quality equal to in terms of considered in the cost analysis?
living in perfect health? A. Yes
A. Two years B. No
B. Three months C. It depends
C. One year D. none of above
D. Six months
15. What is the concept of opportunity cost?
10. Products that are used in conjunction with A. The cost of choosing one alternative
each other. over another
A. Substitutes B. The cost of resources used in produc-
tion
B. Complements
C. The cost of producing an additional
C. Alternative unit of a good or service
D. Expected product D. The cost of goods and services in the
market
11. Two goods that are used jointly to provide
satisfaction are called 16. What is the relationship between effi-
A. Inferior goods ciency and resource costs?
A. Efficiency is unrelated to resource
B. Normal goods
costs
C. Complementary goods
B. Efficiency is the maximization of re-
D. Substitute goods source costs

8. A 9. C 10. B 11. C 12. B 13. A 14. C 15. A 16. C

1.1 HEALTH ECONOMICS 4

C. Efficiency is the minimization of re- A. Less than $10, 000

source costs
B. Between $50, 000 and $100, 000
D. Efficiency is the equalization of re-
source costs C. More than $100, 000
D. Less than $50, 000
17. In which quadrant of Cost-Effectiveness
plane option A is strongly recommended
22. Which of the following defines the incre-
over option B.
mental cost-effectiveness ratio (ICER)?

NARAYAN CHANGDER
A. Q1-Top-right
A. The difference in cost between two
B. Q2-Bottom-right possible interventions, divided by the dif-
C. Q3-Bottom-left ference in their effect.
D. Q4-Top-left B. The ratio between the cost of two pos-
sible interventions
18. What is the purpose of economic evalua-
tion in health programs? C. The utility of the difference in cost be-
tween two possible interventions
A. To chose a program A versus a pro-
gram B based on efficiency D. none of above
B. To evaluate the economic impact of an
intervention 23. What are the components of the DALY

C. I would like to become a physician so A. YLLs + YLDs

I don’t care B. 1-QALY
D. To describe the different cost items of
C. YLDs + Life Expectancy
an intervention
D. YLGs + YLDs
19. How can we decide if the ICER of A vs B is
acceptable 24. Which of the following are methods of
A. Following WHO criteria quantifying quality of life in a given health
state?
B. Looking at a specified threshold
C. Looking at social willingness to pay A. Standard gamble

D. It is acceptable if ICER of A is less than B. Visual Analogue Scale

B C. Value of Statistical life
20. Globalization of Indian economy was initi- D. Time trade-of exercise
ated in the year?
A. 1981 25. Decline in mortality and fertility from the
high rates characteristics of modern and
B. 1985 high-income societies.
C. 1991
A. Concept
D. 1995
B. Demographic Transition
21. What is the threshold cost per quality that
C. Pre-disposing Factor
most governments fund for new interven-
tions? D. Enabling Factor

17. B 18. A 19. A 19. B 19. C 20. C 21. D 22. A 23. A 24. A 24. B 24. D
25. B 26. A
1.1 HEALTH ECONOMICS 5

26. Which of the following correctly define a C. Spiritual Health

QALY? D. Income and Health

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A. 1 year of perfect health for one person
31. When supply and demand are equal (i.e.
B. 1 year additional survival time for one when the supply function and demand func-
person tion intersect) the economy is said to be at
C. 1 year of life lost due to suboptimal A. Balance
healthcare for 1 person B. Equilibrium
D. none of above C. Disequilibrium
27. What is the study of how society decides D. Excess Supply
what, how and for whom to produce? 32. Which management strategy can help im-
A. Chemistry prove efficiency while decreasing cost?
B. Physics A. Increasing resource costs
C. Economics B. Reducing accuracy of information
D. Biology C. Ignoring employee satisfaction
D. Improving financial planning
28. It is a method of pooling risk so that one
person’s loss is shared across many peo- 33. What is the term used to describe goods
ple rather than being borne by the person and services that are scarce relative to our
alone. wants for them?
A. Healthcare Insurance A. Abundant goods
B. Economic goods
B. Insurance
C. Excessive goods
C. Health Insurance
D. Plentiful goods
D. Worker Insurance
34. .... is a branch of economics concerned
29. What is the relationship between price and with issues related to production and con-
quantity supplied according to the law of sumption of health and health care.
demand and supply?
A. Welfare Economics
A. As price increases, quantity supplied B. Public Economics
decreases
C. Health Economics
B. As price increases, quantity supplied
D. Macro Economics
increases
C. As price remains constant, quantity 35. What term describes the value of the best
supplied decreases alternative forgone where, given limited
resources, a choice needs to be made be-
D. As price decreases, quantity suppled tween several mutually exclusive alterna-
increases tives?
30. Characterized by the socioeconomic condi- A. Opportunity cost
tion of the people B. Utility
A. Social Health C. Efficiency
B. Societal Health D. none of above

27. C 28. C 29. B 30. B 31. B 32. D 33. B 34. C 35. A 36. A
1.1 HEALTH ECONOMICS 6

36. Under which market form is a firm a price- 42. Why is it important to improve efficiency
taker in healthcare?
A. perfect A. To maintain costs and benefits at the
B. monopolistic same level

C. monopoly B. To increase benefits without increas-

ing costs
D. none of above
C. To reduce costs without reducing ben-

NARAYAN CHANGDER
37. What is the fundamental driving force for efits
economic activity according to economics? D. To reduce benefits without increasing
A. Abundance costs
B. Scarcity 43. What is the measure of how much your
C. Surplus quality of life would decrease with a cer-
tain outcome called?
D. Excess
A. Probability score
38. Should medical students advocate for a
B. Health score
more equitable and efficient healthcare
system? (heads up:follow up question) C. Utility score
A. yes D. Outcome score
B. no 44. What role does evidence play in decision-
making for care givers and patients?
39. Which are broad approaches to placing a
monetary value on non-market goods? A. Evidence has no role in decision-
making
A. Convex preference
B. Evidence should be ignored in decision-
B. Stated preference
making
C. Revealed preference
C. Evidence should be disseminated for
D. Lexicographic preference informed decisions

40. Which of these is a possible downstream D. Evidence should be kept confidential

savings from care givers and patients

A. In the healthcare sector 45. What is the purpose of economic evalua-

B. In patients or family members tion in healthcare?
C. In productivity gains A. To assess the cost-effectiveness of
healthcare interventions
D. In cost cutting
B. To determine the demand and supply
41. The amount of money saved in the future of healthcare resources
thanks to an effective intervention on road C. To evaluate the effectiveness of
safety is a healthcare staff
A. Cost
D. To analyze the production process of
B. Consequence healthcare facilities

37. B 38. A 38. B 39. B 39. C 40. A 40. B 40. C 41. A 42. C 43. C 44. C 45. A
46. A
1.1 HEALTH ECONOMICS 7

46. What is the cost per quality used as in eval- 51. Which is generally considered the most ap-
uating new interventions? propriate way to value different health
outcomes in economic evaluation?

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A. A standardized metric
A. Value of statistical life
B. A variable metric
B. Components
C. A subjective metric
C. QALYs
D. An irrelevant metric
D. Longevity
47. The social science concerned with how indi-
52. What is the ICER?
viduals and societies decide how to satisfy
their unlimited wants given our limited re- A. Incremental Cost-Effectiveness Ratio
sources. B. Cost index excluding resources
A. Demand C. Incremental Cost Education Rules
B. Health Economics D. Cost Indications to Avoid Risks
C. Economics 53. What is the concept that means the bene-
D. Health System fits that would have resulted from the best
alternative use of resources?
48. What is the true cost of producing a good A. Fixed cost
or service according to economics?
B. Variable cost
A. Financial costs
C. Financial cost
B. Opportunity cost
D. Opportunity cost
C. Variable costs
54. Knowledge, attitude, beliefs, values and
D. Fixed costs intentions
49. What is the typical scenario when a new A. Pre-disposing Factor
intervention provides an improvement but B. Enabling Factor
costs money?
C. Reinforcing factors
A. The government may or may not pay
D. Disposing Factor
for it
B. The government always pays for it 55. What is the demand for health care mainly
demanded for?
C. The government pays for it only if it’s
A. Pleasure
free
B. Improving health
D. The government never pays for it
C. Entertainment
50. What mathematical model is used to com- D. Socializing
bine the utility scores and probabilities?
56. Which type of economic analysis is used to
A. Game theory model
compare interventions without considering
B. Markov model patients preferences/wellness?
C. Econometric model A. Cost-effectiveness analysis (CEA)
D. Regression model B. Cost-benefit Analysis (CBA)

47. C 48. B 49. A 50. B 51. B 51. C 52. A 53. D 54. A 55. B 56. A
1.1 HEALTH ECONOMICS 8

C. Cost-minimisation analysis (CMA) C. Pay for prevention

D. Cost-utility analysis D. Increase co-payment and deductible
for use of high-value providers
57. Financing health care which is particularly
suited for those aspects of healthcare that 62. Which tools we use to measure quality of
are considered private goods. life component of a QALY
A. Health insurance A. Multi-attribute surveys
B. Public subsidy

NARAYAN CHANGDER
B. He hampered his cheek
C. Community financing
C. Stated preferences
D. User charges
D. Willingness to Pay
58. What of the following can be considered a
cost (check all that apply) 63. Which type of economic analysis is used to
compare interventions across government
A. Impacts on employment and leisure expenditure?
time if an intervention
A. Cost-effectiveness analysis (CEA)
B. Informal care
B. Cost-benefit Analysis (CBA)
C. Time spent for an intervention
C. Cost-minimisation analysis (CMA)
D. the disability caused by a side effect of
an intervention D. Cost-utility analysis

59. What term is used to define the extent 64. Which are the decision criteria in Cost-
to which an intervention produces desired Benefit analysis
outcomes
A. Net benefit
A. Effectiveness
B. Cost-benefit ratio
B. Efficiency
C. Return on investment
C. Utility
D. break-even
D. none of above
65. “Why does healthcare cost so much?”
60. What effect is working when the price of
a good falls and consumers tend to buy it A. Because of the demand
instead of other goods. B. Because the raw material is costly
A. Income effect
C. Because people are willing to pay so
B. Substitution effect much for it
C. Price effect D. NONE OF THE ABOVE
D. complementary effect
66. What is the aim of suppliers in a market
61. What is a way to provide financial incen- according to economics?
tives to increase value in healthcare?
A. Maximize income
A. Decrease payment coupled to evalua-
B. Minimize income
tion
B. Stop paying for hospital-acquired in- C. Minimize costs
fection D. Maximize costs

57. D 58. A 58. B 58. C 59. A 60. B 61. C 62. A 62. B 63. B 64. A 64. B
64. C 65. C 66. A 67. B
1.1 HEALTH ECONOMICS 9

67. As a state of complete physical, mental groups or services or institutions in the

and social well-being, not merely the ab- community and the country concerned with
sence of disease or infirmity. the health protection of the population.

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A. Nutrition A. Health System
B. Health B. Health Agency
C. Health Economics C. Health Sector
D. Physical Health D. Health

68. What is the unit used to measure value in 73. It refers to how much buyers desire (quan-
healthcare? tity) of a product or service.
A. Scores A. Supply
B. Qualities B. Economics
C. Dollars C. Law of Demand
D. Years D. Demand

69. Should the prospect of family members be 74. True or false:equity is a synonym for fair-
considered in the analysis of the conse- ness
quences? A. True
A. Yes B. False
B. No 75. Ho do you measure consequences of the
C. It depends intervention in Cost-Utility Analysis
D. none of above A. Currency (monetary value)

70. What type of economic evaluation calcu- B. Quality of life

lates the cost of one treatment versus an- C. Single natural clinical unit
other per specific benefit in natural units? D. QALYs or DALYs
A. Cost Minimisation Analysis (CMA)
76. What is the relationship between price and
B. Cost Effectiveness Analysis (CEA) quantity demanded according to the law of
C. Cost Benefit Analysis (CBA) demand and supply?
D. Cost Utility Analysis (CUA) A. As price increases, quantity demanded
increases
71. Refers to the society’s pool of knowledge
B. As price increases, quantity demanded
used in industry and agriculture.
decreases
A. Technology
C. As price decreases, quantity de-
B. Knowledge manded decreases
C. Information D. As price remains constant, quantity de-
D. Science manded decreases

72. Decline in mortality and fertility from the 77. Which of these is NOT a possible perspec-
high rates characteristics of modern and tive of analysis
high-income societies.Used to indicate the A. Healthcare sector

68. B 69. C 70. B 71. A 72. C 73. D 74. A 75. D 76. B 77. D
1.1 HEALTH ECONOMICS 10

B. Other government sectors A. Balance

C. Third Payer
B. Equilibrium
D. National Perspective
C. Disequilibrium
78. Occurs whenever the price or quantity is
not equal to P* or Q*. D. Excess Supply

NARAYAN CHANGDER

78. C