Which of the following is the formula used for computing economic profits?
A) economic profits = total revenue - implicit costs
B) economic profits = total revenue - (implicit costs + explicit costs)
C) economic profits = total costs - total revenue
D) economic profits = total revenue - explicit costs
Answer: B
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One of the considerations when relying exclusively on cost-effectiveness analysis (CEA) to determine whether a category of people receives an expensive, potentially life-saving, intervention is:
a. CEA studies are considered the gold standard as far as evaluation studies are concerned. b. CEA ignores the possibility that certain unidentified individuals in a group may have a greater than normal positive response to the treatment. c. CEA determines the efficient threshold above which treatments are unnecessarily expensive. d. CEA studies are subjective and rely on the judgment of clinicians and researchers. e. CEA studies take a long time to conduct and are expensive to evaluate.