3. Environmental Economics

Cost Effectiveness — Quiz

Test your understanding of cost effectiveness with 5 practice questions.

Practice Questions

Question 1

Which term describes when an intervention is less efficient than a combination of two other interventions, making it infeasible on the cost-effectiveness frontier?

Question 2

Program C costs \400\,000 and removes 80 units of pollutant; Program D costs \550\,000 and removes 105 units. What is the incremental cost-effectiveness ratio (ICER) of D compared to C?

Question 3

Which graphical representation plots the incremental cost on the y-axis and incremental effect on the x-axis, with a willingness-to-pay threshold line, to compare interventions?

Question 4

Which tool shows the probability that an intervention is cost-effective at different willingness-to-pay thresholds?

Question 5

Why are costs and outcomes typically discounted in a cost-effectiveness analysis?