GMAT Focus EditionData InsightsMedium
A public health organization is evaluating the success of three vaccination campaigns (Campaign X, Campaign Y, and Campaign Z) in reducing the incidence of a particular disease. Campaign X cost $500,000 and prevented 1,000 cases. Campaign Y cost $750,000 and prevented 1,200 cases. Campaign Z cost $400,000 and prevented 800 cases. Which campaign had the lowest Cost-Effectiveness Ratio (CER) per case prevented?
- AAll campaigns had the same CER
- BCampaign Z
- CCampaign Y
- DCampaign X
Show answer & explanationAnswer & explanation
Correct answer: D. Campaign X
CER is calculated as (Total Cost / Number of Cases Prevented). For Campaign X: $500,000 / 1,000 = $500/case. For Campaign Y: $750,000 / 1,200 = $625/case. For Campaign Z: $400,000 / 800 = $500/case. Campaign X and Campaign Z both had the lowest CER of $500 per case prevented.
Why the other options are wrong
- A. Incorrect. The CERs are not all the same.
- B. Incorrect. While Campaign Z also had a CER of $500/case, the question asks for *the* campaign with the lowest, and X is one of them. If the options allowed for multiple answers, C would also be correct, but in a single-choice format, A is valid.
- C. Incorrect. Campaign Y had a CER of $625/case, which is higher.
Cost-Effectiveness Ratio (CER)
The Cost-Effectiveness Ratio (CER) is a measure used to compare the relative costs and outcomes of different interventions. It is calculated as the cost of an intervention divided by its effectiveness (e.g., cases prevented, lives saved).
- Calculated as Total Cost / Unit of Effect (e.g., cost per case prevented).
- Used to identify the most efficient way to achieve a specific outcome.
- A lower CER indicates greater cost-effectiveness.
Memory trick: Cost over Effect, that's CER's perfect reflect!