HMGT 3320 TEST 1 QUESTIONS WITH VERIFIED SOLUTIONS LATEST UPDATE 2026
What is scarcity? - Answers - a deficiency in the QUANTITY and/or QUALITY of available goods
and services compared with the amounts that people desire
- E.g., Lack of affordable healthcare insurance coverage
- I.e., Supply < Demand
In US healthcare, what is the problem of "too much"? - Answers - Healthcare expenditures
~$4.3 trillion
- ~18.3% of GDP ($1/ $5 is spent on healthcare)
➖In 1965, healthcare spend was only ~6% of GDP
"Not enough", side-by-side with "too much" signifies... - Answers resource allocation issue
Economics deals with... - Answers consequences of resource scarcity and making choices
What are 3 tasks of economics?
Define each task. - Answers 1. Description—involves the identification, definition, and
measurement of phenomena
➖Statement of fact, without explanation or analysis
2. Explanation—conducting a cause-and-effect analysis
➖Identifying the causes of the events
➖Uses models to explain
➖No judgement
3. Evaluation—involves judging or ranking alternative phenomena according to some standard
or relative position of alternatives
➖The standard or benchmark must have a level of general acceptance
What is economic variables? - Answers ➖An economically relevant phenomenon whose value
or magnitude may vary
•Prices, costs, income, quantities, etc.
,➖Can be measured along a scale, once appropriate units of measurement have been chosen
•Cents, dollars per unit, # of patient visits, # of hospital beds, etc.
What is Graphic analysis? - Answers purpose is to illustrate relations between economic
variables
What is Models? - Answers — Help us to draw inferences about what happens when the
economic variables are changed
What is the relation between variables?
What are 2 types of relations? - Answers Relations show how one variable changes with respect
to another variable
- Noncausal relations—one variable does not cause a change in another variable
- Causal relations—when one economic variable changes, the value of a second economic
variable also changes as a result
When is the relation positive,negative, or unrelated? - Answers
What does the slope of a relation show? How is the slope when the relation is linear? - Answers
shows how sensitive a change in one variable is to a change in another variable
➖Expressed as the magnitude or sensitivity of response
When the relation is linear, the slope remains constant at every point on the line
What happens to variables when there is similar slopes but different positions? - Answers
Position of relations: one line shows a greater quantity of visits than the other for any given
price.
What is non-linear relationship? - Answers the magnitude of the response varies along the
curve
➖It's not a straight-line relationship like a linear "curve"
What is a fixed cost? - Answers a cost that does not change, no matter how much of a good is
produced
In business, as it increases production, what happens to the slope? - Answers inclining or
declining cost slopes
What is if...then analysis format? - Answers ➖The "If" - Conditions or assumptions
, ➖The "Then" - Conclusions, implications or predictions
What is the Explanatory Economics? - Answers A predication is made and then scenarios are
tested against actual data to see if the prediction can be validated
➖E.g., If vaccines are more easily accessible, then demand will increase
➖How well does the model explain or predict what will actually happen
Whar is the Evaluative Economics? - Answers actual data is compared against an ideal set of
events
➖If we add one more compliance specialist, will the costs associated with rejected claims be
reduced by more than the cost of the added specialist?
Whats are DESCRIPTIVE ECONOMIC ELEMENTS? - Answers - Identify the phenomena of concern
- Define the phenomena to know their nature precisely
- Measure the phenomena to obtain understanding of their magnitude
What is the first approach to identifying HC factors? - Answers Approach 1: Examine factors that
directly influence health
- Lifestyle elements: diet, sleep, smoking, and other individual behaviors
- Social determinants: income, job, family, community
- Environmental factors: air and water purity
- Genetic factors
- Medical care: preventative services and treatment interventions
What is the second approach to identifying HC factors? - Answers Identify the impact that
medical care has on the health status of an individual or society
The production of any ... (e.g., health) requires ... (e.g., medical resources) - Answers output
inputs
What is scarcity? - Answers - a deficiency in the QUANTITY and/or QUALITY of available goods
and services compared with the amounts that people desire
- E.g., Lack of affordable healthcare insurance coverage
- I.e., Supply < Demand
In US healthcare, what is the problem of "too much"? - Answers - Healthcare expenditures
~$4.3 trillion
- ~18.3% of GDP ($1/ $5 is spent on healthcare)
➖In 1965, healthcare spend was only ~6% of GDP
"Not enough", side-by-side with "too much" signifies... - Answers resource allocation issue
Economics deals with... - Answers consequences of resource scarcity and making choices
What are 3 tasks of economics?
Define each task. - Answers 1. Description—involves the identification, definition, and
measurement of phenomena
➖Statement of fact, without explanation or analysis
2. Explanation—conducting a cause-and-effect analysis
➖Identifying the causes of the events
➖Uses models to explain
➖No judgement
3. Evaluation—involves judging or ranking alternative phenomena according to some standard
or relative position of alternatives
➖The standard or benchmark must have a level of general acceptance
What is economic variables? - Answers ➖An economically relevant phenomenon whose value
or magnitude may vary
•Prices, costs, income, quantities, etc.
,➖Can be measured along a scale, once appropriate units of measurement have been chosen
•Cents, dollars per unit, # of patient visits, # of hospital beds, etc.
What is Graphic analysis? - Answers purpose is to illustrate relations between economic
variables
What is Models? - Answers — Help us to draw inferences about what happens when the
economic variables are changed
What is the relation between variables?
What are 2 types of relations? - Answers Relations show how one variable changes with respect
to another variable
- Noncausal relations—one variable does not cause a change in another variable
- Causal relations—when one economic variable changes, the value of a second economic
variable also changes as a result
When is the relation positive,negative, or unrelated? - Answers
What does the slope of a relation show? How is the slope when the relation is linear? - Answers
shows how sensitive a change in one variable is to a change in another variable
➖Expressed as the magnitude or sensitivity of response
When the relation is linear, the slope remains constant at every point on the line
What happens to variables when there is similar slopes but different positions? - Answers
Position of relations: one line shows a greater quantity of visits than the other for any given
price.
What is non-linear relationship? - Answers the magnitude of the response varies along the
curve
➖It's not a straight-line relationship like a linear "curve"
What is a fixed cost? - Answers a cost that does not change, no matter how much of a good is
produced
In business, as it increases production, what happens to the slope? - Answers inclining or
declining cost slopes
What is if...then analysis format? - Answers ➖The "If" - Conditions or assumptions
, ➖The "Then" - Conclusions, implications or predictions
What is the Explanatory Economics? - Answers A predication is made and then scenarios are
tested against actual data to see if the prediction can be validated
➖E.g., If vaccines are more easily accessible, then demand will increase
➖How well does the model explain or predict what will actually happen
Whar is the Evaluative Economics? - Answers actual data is compared against an ideal set of
events
➖If we add one more compliance specialist, will the costs associated with rejected claims be
reduced by more than the cost of the added specialist?
Whats are DESCRIPTIVE ECONOMIC ELEMENTS? - Answers - Identify the phenomena of concern
- Define the phenomena to know their nature precisely
- Measure the phenomena to obtain understanding of their magnitude
What is the first approach to identifying HC factors? - Answers Approach 1: Examine factors that
directly influence health
- Lifestyle elements: diet, sleep, smoking, and other individual behaviors
- Social determinants: income, job, family, community
- Environmental factors: air and water purity
- Genetic factors
- Medical care: preventative services and treatment interventions
What is the second approach to identifying HC factors? - Answers Identify the impact that
medical care has on the health status of an individual or society
The production of any ... (e.g., health) requires ... (e.g., medical resources) - Answers output
inputs
