You have been using Drug A as a standard of care for chemotherapy and now Drug B, a new chemo drug, is being considered for procurement by the hospital. Drug A prolongs life by 1 year and reduces quality of life of your patients by 35% due to its side effects. For you to decide to replace Drug A with Drug B it must have a quality adjusted life year in excess of: a. 0.5 b. 0.45 c. 0.6 d. 0.65

You have been using Drug A as a standard of care for chemotherapy and now Drug B, a new chemo drug, is being considered for procurement by the hospital. Drug A prolongs life by 1 year and reduces quality of life of your patients by 35% due to its side effects. For you to decide to replace Drug A with Drug B it must have a quality adjusted life year in excess of: a. 0.5 b. 0.45 c. 0.6 d. 0.65

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter20: The Problem Of Adverse Selection Moral Hazard

Section: Chapter Questions

Problem 3MC

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