Given Incremental Cost 5, Incremental Effect 1, WTP 3, what is the Net Monetary Benefit (NMB)?

Unlock all questions

This demo includes only 20 questions. Upgrade to access hundreds of questions, flashcards, exam simulations, and disable ads.

Full question bankExam simulationsFlashcards
From $25.99Unlock all

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 5, Incremental Effect 1, WTP 3, what is the Net Monetary Benefit (NMB)?

Explanation:
Net Monetary Benefit is found by valuing the health gain at the given willingness to pay and subtracting the extra cost. Here, the health gain is 1 unit and each unit is worth 3, so the benefit value is 3. Subtract the incremental cost of 5, and NMB = 3 − 5 = −2. A negative NMB means this option isn’t cost-effective at the stated WTP. The other numbers would require different balances (for example, a benefit value of 5 would yield zero, or more than 5 would yield a positive NMB), but with the given values the correct NMB is −2.

Net Monetary Benefit is found by valuing the health gain at the given willingness to pay and subtracting the extra cost. Here, the health gain is 1 unit and each unit is worth 3, so the benefit value is 3. Subtract the incremental cost of 5, and NMB = 3 − 5 = −2. A negative NMB means this option isn’t cost-effective at the stated WTP. The other numbers would require different balances (for example, a benefit value of 5 would yield zero, or more than 5 would yield a positive NMB), but with the given values the correct NMB is −2.

More Multiple Choice Questions
Subscribe

Get the latest from Passetra

You can unsubscribe at any time. Read our privacy policy