
(a)
The key screening strategies and the reason for them to be important than others.
(a)

Explanation of Solution
As per the table, option 1, 3 and 6 could be considered as dominant options. In option 1 it is true that there is an incremental cost. Nevertheless, its QALY value is positive. Hence it could be considered as dominant. Further, in option 3, a positive QALY has been derived with an incremental cost that is considerably low. In option 6, both the tests could be done. However, the incremental cost involved does not seem alarming. Its QALY value is also a positive figure.
Introduction:
When selecting between various treatment options, it is important to look into various measures that make them dominant. In this case, the cost of the treatment as well as the QALY value has been looked into. QALY or Quality Adjusted Life Year is a weighted average measure that takes into account both the qualitative and quantitative aspects of the burden of a disease. This is helpful in determining the level of medical intervention needed.
(b)
The incremental cost values, incremental QALY values and incremental cost effective ratios for the treatment options that seem to be economically rationale and state why they are so.
(b)

Explanation of Solution
As per the table, option 3 and 6 seems to be economically rationale. Option 3 has an incremental value that is considerably low, together with a positive QALY value. Option 6 too consists of a somewhat lower incremental cost with a positive QALY value. Hence both these options could be considered as economically rational.
Introduction:
In determining the economically rational treatment options out of a list, it is important to consider measures such as the incremental cost, incremental QALY and the incremental cost effectiveness ratio. An economically rational option would ideally have a lower incremental cost and a positive QALY value.
(c)
The best strategy to be recommended from a standpoint of public health.
(c)

Explanation of Solution
As per the table, option 6 could be considered the best strategy to be recommended from a public health standpoint. The option included both the tests Pap and HPV, with a reasonable incremental cost as well as a positive QALY value. Hence it could be recommended as the best strategy.
Introduction:
When recommending health strategies from the perspective of public health, it is important that they address to the needs of a wider population, at a lower cost. In this regard, out of the strategy options given, the one with a considerably low incremental cost together with a positive QALY value must be selected.
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Chapter 4 Solutions
EBK HEALTH ECONOMICS AND POLICY
- Consider the figure. A perfectly price-discriminating monopolist will produce ○ A. 162 units and charge a price equal to $69. ○ B. 356 units and charge a price equal to $52 for the last unit sold only. OC. 162 units and charge a price equal to $52. OD. 356 units and charge a price equal to the perfectly competitive price. Dollars per Unit $69 $52 MR 162 356 Output MC Darrow_forwardThe figure at right shows the demand line, marginal revenue line, and cost curves for a single-price monopolist. Now suppose the monopolist is able to charge a different price on each different unit sold. The profit-maximizing quantity for the monopolist is (Round your response to the nearest whole number.) The price charged for the last unit sold by this monopolist is $ (Round your response to the nearest dollar.) Price ($) 250 225- 200- The monopolist's profit is $ the nearest dollar.) (Round your response to MC 175- 150 ATC 125- 100- 75- 50- 25- 0- °- 0 20 40 60 MR 80 100 120 140 160 180 200 Quantityarrow_forwardThe diagram shows a pharmaceutical firm's demand curve and marginal cost curve for a new heart medication for which the firm holds a 20-year patent on its production. At its profit-maximizing level of output, it will generate a deadweight loss to society represented by what? A. There is no deadweight loss generated. B. Area H+I+J+K OC. Area H+I D. Area D + E ◇ E. It is not possible to determine with the information provided. (...) 0 Price 0 m H B GI A MR MC D Outparrow_forward
- Consider the figure on the right. A single-price monopolist will produce ○ A. 135 units and charge a price equal to $32. B. 135 units and generate a deadweight loss. OC. 189 units and charge a price equal to the perfectly competitive price. ○ D. 189 units and charge a price equal to $45. () Dollars per Unit $45 $32 MR D 135 189 Output MC NGarrow_forwardSuppose a drug company cannot prevent resale between rich and poor countries and increases output from 3 million (serving only the rich country with a price of $80 per treatment) to 9 million (serving both the rich and the poor countries with a price of $30 per treatment). Marginal cost is constant and equal to $10 per treatment in both countries. The marginal revenue per treatment of increasing output from 3 million to 9 million is equal to ○ A. $20 per treatment, which is greater than the marginal cost of $10 per treatment and thus implies that profits will rise. ○ B. $20 per treatment, which is greater than zero and thus implies that profits will rise. ○ C. $30 per treatment, which is greater than the marginal cost of $10 per treatment and thus implies that profits will rise. ○ D. $5 per treatment, which is less than the marginal cost of $10 per treatment and thus implies that profits will fall. ○ E. $30 per treatment, which is less than the marginal revenue of $80 per treatment…arrow_forwardConsider the figure. A single-price monopolist will have a total revenue of Single-Price Monopolist OA. 84×$13. O B. 92x $13. OC. 84×$33. OD. 92 x $33. C Price ($) $33 $13 MC MR D 84 92 Output The figure is not drawn to scale.arrow_forward
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- 4. Supply and Demand. The table gives hypothetical data for the quantity of electric scooters demanded and supplied per month. Price per Electric Scooter Quantity Quantity Demanded Supplied $150 500 250 $175 475 350 $200 450 450 $225 425 550 $250 400 650 $275 375 750 a. Graph the demand and supply curves. Note if you prefer to hand draw separately, you may and insert the picture separately. Price per Scooter 300 275 250 225 200 175 150 250 400 375425475 350 450 550 650 750 500 850 Quantity b. Find the equilibrium price and quantity using the graph above. c. Illustrate on your graph how an increase in the wage rate paid to scooter assemblers would affect the market for electric scooters. Label any new lines in the same graph above to distinguish changes. d. What would happen if there was an increase in the wage rate paid to scooter assemblers at the same time that tastes for electric scooters increased? 1ངarrow_forward3. Production Costs Clean 'n' Shine is a competitor to Spotless Car Wash. Like Spotless, it must pay $150 per day for each automated line it uses. But Clean 'n' Shine has been able to tap into a lower-cost pool of labor, paying its workers only $100 per day. Clean 'n' Shine's production technology is given in the following table. To determine its short-run cost structure, fill in the blanks in the table. Fill in the columns below. Outpu Capita Labor TFC TVC TC MC AFC AVC ATC 1 0 30 1 1 70 1 2 120 1 3 160 1 4 190 1 5 210 1 6 a. Over what range of output does Clean 'n' Shine experience increasing marginal returns to labor? Over what range does it experience diminishing marginal returns to labor? (*answer both questions) b. As output increases, do average fixed costs behave as described in the text? Explain. C. As output increases, do marginal cost, average variable cost, and average total cost behave as described in the text? Explain. d. Looking at the numbers in the table, but without…arrow_forward2. Elasticity and the Minimum Wage - The following graph depicts two labor markets for cashiers. We assume the same supply curve (cashiers respond similarly to wage offers in each city) but different demand functions (employer demand is more elastic – more responsive to wages - in one city than the other, perhaps because one has higher quality retail stores than the other). The y-axis shows hourly wages in dollars; the x-axis shows the number of employees in hundreds. Wage 12 11 29 10 9 00 8 7 Supply 5 4 3 2 1 D2 12 D1 0 0 1 2 3 4 5 6 7 8 9 10 11 12 Employment 11 With minimum wage of 8 dollars: A. What is the equilibrium level of employment before the minimum wage is imposed? B. A) According to the graph and given a minimum wage of 8 dollars, how many workers would employers want to hire if the demand for workers in City #1 looked like D1? B) How does that number compare to the market equilibrium employment? C. A) In City #1 (with demand curve D1), would there be an excess supply of…arrow_forward
- Exploring EconomicsEconomicsISBN:9781544336329Author:Robert L. SextonPublisher:SAGE Publications, Inc
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