MHA 710 EXAM 1 / MHA 710 ACTUAL EXAM 1
QUESTIONS AND COMPLETE VERIFIED ANSWERS
RATED A LATEST UPDATE 2024 | MHA 710 EXAM 1,
WHAT IS ‘‘ECONOMICS’’
What is "economics"?
A Map for decision making. Economics analyzes the allocation of scarce
resources.
What are some of the specific challenges faced by managers in healthcare?
1. The central roles of risk and uncertainty
2. The complexities created by insurance
3. The perils produced by information asymmetries
4. The problems posed by not-for-profit organizations
5. The rapid and confusing course of technical and institutional change
What does asymmetric information mean? Can you give an example?
When one party in a transaction has less information than the other party. For
example, physicians and other healthcare providers usually understand
patients' medical options better than patients do. Unaware of their choices,
,patients may accept recommendations for therapies that are not cost-effective
or, recognizing their vulnerability to physicians' self-serving advice, may resist
recommendations made in their best interest.
What is adverse selection?
A situation that occurs when buyers have better information than sellers. For
example, high-risk consumers are willing to pay more for insurance than low-
risk consumers are. (Organizations that have difficulty distinguishing high-risk
from low-risk consumers are unlikely to be profitable.)
What is the problem of scarcity?
Demand for a good or service is greater than the availability
What does it mean to say people are assumed to make choices rationally?
focuses on individuals' efforts to best realize their goals, given their resources.
What does it mean to says resources are scarce?
Anything useful in consumption or production that has alternative uses.
What is opportunity cost?
Potential loss from a missed opportunity. Passing up the next best choice.
, What does "marginal" refer to?
The examination of the costs and benefits through a small change in the
production of goods
What does efficiency refer to?
No way to rearrange production of goods in a way that makes one person more
better off without making somebody else worse off. How well an economy uses
scare resources to meet the needs/wants of their customers
How do positive economic statements differ from normative economic
statements?
Positive economics is objective while normative economics is subjective. Facts/
What is vs What should be
How can economics be applied to the health sector?
Describe, Explain, Evaluate, Plan
As we progress through the chapters, think about the special characteristics that
apply to the health sector that might limit the applicability of traditional economic
models.
QUESTIONS AND COMPLETE VERIFIED ANSWERS
RATED A LATEST UPDATE 2024 | MHA 710 EXAM 1,
WHAT IS ‘‘ECONOMICS’’
What is "economics"?
A Map for decision making. Economics analyzes the allocation of scarce
resources.
What are some of the specific challenges faced by managers in healthcare?
1. The central roles of risk and uncertainty
2. The complexities created by insurance
3. The perils produced by information asymmetries
4. The problems posed by not-for-profit organizations
5. The rapid and confusing course of technical and institutional change
What does asymmetric information mean? Can you give an example?
When one party in a transaction has less information than the other party. For
example, physicians and other healthcare providers usually understand
patients' medical options better than patients do. Unaware of their choices,
,patients may accept recommendations for therapies that are not cost-effective
or, recognizing their vulnerability to physicians' self-serving advice, may resist
recommendations made in their best interest.
What is adverse selection?
A situation that occurs when buyers have better information than sellers. For
example, high-risk consumers are willing to pay more for insurance than low-
risk consumers are. (Organizations that have difficulty distinguishing high-risk
from low-risk consumers are unlikely to be profitable.)
What is the problem of scarcity?
Demand for a good or service is greater than the availability
What does it mean to say people are assumed to make choices rationally?
focuses on individuals' efforts to best realize their goals, given their resources.
What does it mean to says resources are scarce?
Anything useful in consumption or production that has alternative uses.
What is opportunity cost?
Potential loss from a missed opportunity. Passing up the next best choice.
, What does "marginal" refer to?
The examination of the costs and benefits through a small change in the
production of goods
What does efficiency refer to?
No way to rearrange production of goods in a way that makes one person more
better off without making somebody else worse off. How well an economy uses
scare resources to meet the needs/wants of their customers
How do positive economic statements differ from normative economic
statements?
Positive economics is objective while normative economics is subjective. Facts/
What is vs What should be
How can economics be applied to the health sector?
Describe, Explain, Evaluate, Plan
As we progress through the chapters, think about the special characteristics that
apply to the health sector that might limit the applicability of traditional economic
models.
