Given Incremental Cost 100, Incremental Effect 2, and WTP 50, what is the Net Monetary Benefit (NMB)?

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Study for the WHEBP Evidence as it Relates to Cost Test. Use flashcards and multiple-choice questions, with explanations and hints. Prepare for your exam efficiently!

Multiple Choice

Given Incremental Cost 100, Incremental Effect 2, and WTP 50, what is the Net Monetary Benefit (NMB)?

Explanation:
Net Monetary Benefit is calculated as NMB = (Incremental Effect × Willingness-To-Pay) − Incremental Cost. Here, Incremental Effect is 2 and Willingness-To-Pay is 50, so 2 × 50 = 100. Subtract the Incremental Cost of 100: 100 − 100 = 0. So the NMB is 0, meaning the intervention is exactly at the threshold of cost-effectiveness for this WTP. If the product were higher, NMB would be positive (cost-effective); if lower, NMB would be negative.

Net Monetary Benefit is calculated as NMB = (Incremental Effect × Willingness-To-Pay) − Incremental Cost. Here, Incremental Effect is 2 and Willingness-To-Pay is 50, so 2 × 50 = 100. Subtract the Incremental Cost of 100: 100 − 100 = 0. So the NMB is 0, meaning the intervention is exactly at the threshold of cost-effectiveness for this WTP. If the product were higher, NMB would be positive (cost-effective); if lower, NMB would be negative.

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