Estimate total direct costs in year 1 using the prevalence approach.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Let us assume that the incidence of a disease is two individuals per year. The direct costs per
person per year, including the cost of the patient's time, are 5,000 m.u. annual morbidity
costs are 4,000 m.u, and annual costs due to productivity losses are 10,000 m.u. All the
previous monetary values refer to year 1.
The life expectancy of a person who has contracted the illness is 4 years. Therefore, a person
who contracts the illness at the beginning of this year (year 1) will survive until the end of year
4 and will die at the beginning of year 5. On the other hand, every year 8 individuals will have
this iness and the annual mortality will be of 2 individuals (who caught the disease 4 years
agol. Premature death due to the liness represents a loss of 5 life years per individual. The
discount rate is 4%
Estimate total direct costs in year 1 using the prevalence approach.
Select one
Oa Total direct costs using the prevalence approach cannot be estimated with the
Information provided in this question.
Db 40,000 m.u
Oc 10,000 m.u.
Od 20,000 ma
Transcribed Image Text:Let us assume that the incidence of a disease is two individuals per year. The direct costs per person per year, including the cost of the patient's time, are 5,000 m.u. annual morbidity costs are 4,000 m.u, and annual costs due to productivity losses are 10,000 m.u. All the previous monetary values refer to year 1. The life expectancy of a person who has contracted the illness is 4 years. Therefore, a person who contracts the illness at the beginning of this year (year 1) will survive until the end of year 4 and will die at the beginning of year 5. On the other hand, every year 8 individuals will have this iness and the annual mortality will be of 2 individuals (who caught the disease 4 years agol. Premature death due to the liness represents a loss of 5 life years per individual. The discount rate is 4% Estimate total direct costs in year 1 using the prevalence approach. Select one Oa Total direct costs using the prevalence approach cannot be estimated with the Information provided in this question. Db 40,000 m.u Oc 10,000 m.u. Od 20,000 ma
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