Homework Answers
a.If the screening test is given to 100 people,it will cost 100*$50=$5000.
20% of 100 people tested positive means a total of 20 people tested positive.Therefore a total of 20*$500=$10,000 of future cost treatments have been averted.
$10,000-$5000= $5000 is saved by setting up a screening system.
b.Now only 7% test positive, that means 7 people test positive.That means a total of 7*$500=$3500 of future treatment cost has been averted.
Now, loss incurred by setting up screening system =$5000-$3500=$1500.
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