Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 21 - Health Care - Problems - Page 453: 3a

Answer

Total cost to give all 100 tests: ${$10,000}$ Total averted expenses: ${$15,000}$ Total savings: ${$5,000}$

Work Step by Step

It costs ${$100}$ per test, so to give it to 100 people, it would cost ${$10,000}$. Suppose 15 people will test positive, the future treatment costs averted $15\times 1,000=15,000$. With a total cost of ${$10,000}$, and averted expenses of ${$15,000}$, it will save a total of $15,000-10,000={$5,000}$.
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