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Preventive care is not always cost-effective. Suppose that it costs $200 per person to administer a screening exam for a particular disease. Also suppose that if the screening exam finds the disease, the early detection given by the exam will avert $2,000 of costly future treatment.

Preventive care is not always cost-effective. Suppose that it costs $200 per person to administer a screening exam for a particular disease. Also suppose that if the screening exam finds the disease, the early detection given by the exam will avert $2,000 of costly future treatment.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Preventive care is not always cost-effective. Suppose that it costs $200 per person to administer a screening exam for a particular BY disease. Also suppose that if the screening exam finds the disease, the early detection given by the exam will avert $2,000 of costly future treatment. Instructions: Enter your answers as a whole number. a. Imagine giving the screening test to 100 people. How much will it cost to give those 100 tests? $ Imagine a case in which 25 percent of those receiving the screening exam test positive. How much in future costly treatments will be averted? $ How much is saved by setting up a screening system? $ b. Imagine that everything is the same as in part a except that now only 8 percent of those receiving the screening exam test positive. In this case, how much in future costly treatments will be averted? $ How much is lost by setting up a screening system? $
Transcribed Image Text:Preventive care is not always cost-effective. Suppose that it costs $200 per person to administer a screening exam for a particular BY disease. Also suppose that if the screening exam finds the disease, the early detection given by the exam will avert $2,000 of costly future treatment. Instructions: Enter your answers as a whole number. a. Imagine giving the screening test to 100 people. How much will it cost to give those 100 tests? $ Imagine a case in which 25 percent of those receiving the screening exam test positive. How much in future costly treatments will be averted? $ How much is saved by setting up a screening system? $ b. Imagine that everything is the same as in part a except that now only 8 percent of those receiving the screening exam test positive. In this case, how much in future costly treatments will be averted? $ How much is lost by setting up a screening system? $
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