# Texas A & M International University Economics Questionnaire

## Question Description

I’m working on a economics question and need guidance to help me learn.

1.There are three approaches of estimating QALYs. There is no right answer to this question. Simply state your preferences. Assume that a person does not have a leg but is perfectly healthy otherwise.

Use visual analogue scale. If it were you, how would you rank your health between 0 and 1 with 0 being dead and 1 being in perfect health. Your q=?

2.There are three approaches of estimating QALYs. There is no right answer to this question. Simply state your preferences. Assume that a person does not have a leg but is perfectly healthy otherwise.

Use time trade-off approach. Pretend that you have 15 years of life left without a leg. How many years of perfect life would be equivalent to 15 years without leg. Years in perfect health =? Calculate q.

3.There are three approaches of estimating QALYs. There is no right answer to this question. Simply state your preferences. Assume that a person does not have a leg but is perfectly healthy otherwise.

Use standard gamble approach. You have a choice between 17 years of life without a leg with certainty or you can choose a medical procedure that gives “p” probability of living a normal health and (1-p) probability of dying. What probability would make you indifferent between these two options? p=?

4.Use willingness to pay approach to calculate value of human life. Probability of a child dying in a car accident is 2 per 100,000 children. Using child car seat reduces probability of dying by 45%. If a car seat costs \$120, what is the value of life?

5.You are trying to evaluate cost-benefit analysis of mask wearing during the pandemic. Identify as many indirect & direct costs and benefits of mask wearing as you can.

6. You got sick with a flu and you have two approaches of treatment: 1) buy a chicken soup and ibuprofen that would cost \$20 for a 7-day supply; flu lasts 7 days and your quality (utility) weight is .55; 2) take Tamiflu that costs \$175 for a 7-day supply; flu lasts 7 days and quality (utility) weight is .6. Calculate incremental cost-effectiveness ratio of the 2nd strategy relative to the 1st.

7. Assume that health-related quality of life over 5 years for diabetic women and treated women represented in the following table. How much would society be willing to pay for the treatment assuming threshold for cost per QALY of \$75,000. You can also assume zero discount rate and probability of survival 1 for all these years. (Hint: calculate gain in QALYs first). Show your work.

 Year Diabetic Women Treated Women 1 0.65 0.8 2 0.60 0.8 3 0.55 0.75 4 0.50 0.70 5 0.45 0.70

8.The following table provides the total social costs and total social benefits from a federal policy to remove dangerous chemicals from our drinking water supplies. What level of removal would you recommend? WHY? Show your work. (Hint: MB=MC)

 Level of removal Total Costs Total Benefits 0% \$0 \$0 10% 16 86 20% 37 157 30% 59 219 40% 91 282 50% 124 336 60% 167 384 70% 211 428 80% 260 465 90% 315 485 100% 375 500