Athabasca University, Athabasca

ECON HADM 321Key Topic Areas to Study for ECON321/HADM321 Final Examination
Please review the differences between a change in demand and a change in quantity
demanded and the respective causes of each, also changes in supply as opposed to changes
in quantity supplied. Remember that only one curve shifts when there is one event,
not both curves. Review the factors that affect the direction of the demand curve, the
slope of the demand curve, and the position of the demand curve.
Review the concept of elasticity of demand, including the calculation and interpretation of
this concept. This will include the idea of inelastic demand , unit elastic demand, as well as
elastic demand and how total revenue is impacted differently with price changes upward
and downward with these three types of elasticity.
Review insurance concepts such as copayment and loading factor, including total cost to all
policy holders and cost per policy holder. Please note that the loading factor is added on to
the premium after the copayment has been deducted.
Review calculation of hospital occupancy rates based upon hospital capacity, number of
patients served and average length of stay in the hospital. Also be able to calculate the
change in length of stay when there is a change in hospital occupancy and a change in the
number of patients served.
Review costs - calculation of TFC, TVC, TC, AFC, AVC, ATC, MC. Distinguish between short run
and long run costs. Discuss the meaning and underlying reasons for the occurrence of
economies of scale as well as diseconomies of scale.
Review rates per thousand for morbidity and mortality calculations. Compare the
effectiveness of both of these measures as well as the concept of quality of life and how the
health of a population can be assessed.
Review key concepts such as supplier induced demand, short run compared to long run,
need compared to demand, health care versus medical care, price discrimination, key
provisions of the Canada Health Act, consumption versus investment, short run versus long
run, law of diminishing returns, economies and diseconomies of scale. Please review the
glossary in the hard copy or online text for key terms.
Review the pros and cons of different physician payment methods, of which there are four
that are covered in the course(fee for service, fee per visit, salary and capitation).
Review marginal revenue and marginal cost and profit maximization and determine the most
profitable combination of private patients and public patients, given fee data for private
patients and public patients. It is important to note that marginal revenue starts high and
declines with private patients(based upon the principles of demand), while marginal revenue
for funded public patients stays constant.