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The table below represents the costs and benefits of four alternative programs designed to treat a life-threatening disease that afflicts all people over the age
- The table below represents the costs and benefits of four alternative programs designed to treat a life-threatening disease that afflicts all people over the age of 18 (children are immune to the disease).
Program | Costs($) | Life Saved | Cost-Effectiveness Ratio |
A | 100,000 | 10 |
|
B | 100,000 | 12 |
|
C | 200,000 | 12 |
|
D | 200,000 | 15 |
|
- Fill in the cost effectiveness ratio (average cost per life saved) column of the table. In terms of the cost-effectiveness ratio, state which program is the best and briefly explain why? Hint: Your answer should be very specific.
Now suppose that program B is targeted at saving the lives of senior citizens (aged 65 and older), while program C is targeted at saving the lives of young adults (aged 18-30). Ignore alternatives A and D for question (b).
- In this scenario, provide an economic argument in support of choosing program C over program B? Briefly explain your answer. Be sure to use economic reasoning rather than morals or emotion and be specific.
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