Health Economics | Assignment-2

Running head: HEALTH ECONOMICS
Health Economics
Name of the Student
Name of the University
Course ID

HEALTH ECONOMICS1
Table of Contents
Question 1........................................................................................................................................2
Question 1.1.................................................................................................................................2
Question 1.2.................................................................................................................................2
Question 1.3.................................................................................................................................2
Question 1.4.................................................................................................................................3
Question 1.5.................................................................................................................................3
Question 2........................................................................................................................................3
Question 2.1.................................................................................................................................3
Question 2.2.................................................................................................................................4
Question 2.3.................................................................................................................................5
Question 3........................................................................................................................................5
Question 3.1.................................................................................................................................5
Question 3.2.................................................................................................................................5
Question 3.3.................................................................................................................................6
Question 3.4.................................................................................................................................6
Question 3.5.................................................................................................................................7
Question 4........................................................................................................................................7
References........................................................................................................................................8

HEALTH ECONOMICS2
Question 1
Question 1.1
Given the scenario that result of conventional and new treatment method are the same,
consumers (here the patients) enjoy the same utility from both the treatment. With same level of
utility, consumers’ decision depends on price of the treatment and available resources to the
consumers (Brazier et al., 2017). A particular consumption will choose the method with lower
cost and convenient methodology of treatment.
Question 1.2
The cost of parking close to a physician clinic with a fee of 20 AED per hour. As an
alternative to parking close to physician clinic is to park further away from the clinic and spends
15 minutes more walking with the opportunity cost of walking being 600 AED per hour. In the
presence of opportunity cost of an activity, the patient should evaluate both the absolute and
opportunity of the activity. Given the opportunity cost of walking is higher compared to parking
car close to clinic, the consumer should park close to physician.
Question 1.3
The method of economic evaluation refers to the comparison of the different intervention
of same problem considering cost and consequent. The appropriate evaluation method for the
given case is the cost effective evaluation method where cost of an activity is measured in terms
of effectiveness of final outcome (Coast & De Allegri, 2018). The consequence of the trial is
greater longevity. The cost effective method should be used since the object here is to increase
survival rate of the patient.