Question 1

Previously paid sunk costs do not factor into most decisions since they can't be recouped.

Accepted Answer

A) True 
 B)False  True

Question 2

Short-run average variable costs decrease initially, but then begin to rise due to diminishing marginal productivity of labor.

Accepted Answer

A) True 
 B)False  True

Question 3

_______ occur when the cost of producing a medical service decreases as the quantity produced increases.

Accepted Answer

A)  Economies of scale 
B)  Economies of scope 
C)  Diseconomies of scale 
D)  Diseconomies of scope 
E)  None of the above 
A)  Economies of scale 
B)  Economies of scope 
C)  Diseconomies of scale 
D)  Diseconomies of scope 
E)  None of the above A

Question 4

The _______ of nurses is represented as the change in medical services provided by an additional unit of nurse-labor.

Accepted Answer

A)  marginal product 
B)  marginal cost 
C)  average product 
D)  opportunity cost 
E)  none of the above 
A)  marginal product 
B)  marginal cost 
C)  average product 
D)  opportunity cost 
E)  none of the above

Question 5

Which of the following best explains why production might increase at a decreasing rate with the addition of a variable input?

Accepted Answer

A)  Increasing marginal opportunity costs 
B)  Increasing marginal productivity of labor 
C)  Diminishing marginal productivity of labor 
D)  Advancements in technology 
E)  Diminishing marginal opportunity costs 
A)  Increasing marginal opportunity costs 
B)  Increasing marginal productivity of labor 
C)  Diminishing marginal productivity of labor 
D)  Advancements in technology 
E)  Diminishing marginal opportunity costs

Question 6

_______ reflect the alternatives given up by using resources to produce medical services.

Accepted Answer

A)  Marginal costs 
B)  Fixed costs 
C)  Explicit costs 
D)  Implicit costs 
E)  Variable costs 
A)  Marginal costs 
B)  Fixed costs 
C)  Explicit costs 
D)  Implicit costs 
E)  Variable costs

Question 7

If a hospital is experiencing diseconomies of scale, it can reduce the average total cost of production by producing a greater quantity of medical services.

Accepted Answer

A) True 
 B)False

Question 8

In the short run, the average fixed cost of production _______ as the quantity of medical services _______.

Accepted Answer

A)  decreases; decreases 
B)  increases; increases 
C)  doesn't change; increases 
D)  doesn't change; decreases 
E)  decreases; increases 
A)  decreases; decreases 
B)  increases; increases 
C)  doesn't change; increases 
D)  doesn't change; decreases 
E)  decreases; increases

Question 9

If the marginal product is greater than the average product of physicians, then the average product of physicians must be increasing.

Accepted Answer

A) True 
 B)False

Question 10

If the average product of dental assistants is _______, then the marginal product of that labor must be _______ its average product.

Accepted Answer

A)  increasing; less than 
B)  decreasing; equal to 
C)  decreasing; less than 
D)  increasing; equal to 
E)  decreasing; greater than 
A)  increasing; less than 
B)  decreasing; equal to 
C)  decreasing; less than 
D)  increasing; equal to 
E)  decreasing; greater than

Question 11

In the short run, if the marginal cost of production is equal to the average total cost of production, then the average total cost is _______.

Accepted Answer

A)  less than the average variable cost 
B)  less than the average fixed cost 
C)  maximized 
D)  minimized 
E)  equal to the average variable cost 
A)  less than the average variable cost 
B)  less than the average fixed cost 
C)  maximized 
D)  minimized 
E)  equal to the average variable cost

Question 12

_______ occur when the cost of producing two outputs is less than the sum of the costs incurred when producing each output individually.

Accepted Answer

A)  Economies of scale 
B)  Economies of scope 
C)  Diseconomies of scale 
D)  Diseconomies of scope 
E)  None of the above 
A)  Economies of scale 
B)  Economies of scope 
C)  Diseconomies of scale 
D)  Diseconomies of scope 
E)  None of the above

Question 13

The _______ of nurses is represented as the total amount of medical services produced divided by the total amount of nurse-labor.

Accepted Answer

A)  marginal product 
B)  marginal cost 
C)  average product 
D)  opportunity cost 
E)  none of the above 
A)  marginal product 
B)  marginal cost 
C)  average product 
D)  opportunity cost 
E)  none of the above

Question 14

If a hospital is cost-minimizing, then the marginal productivity per dollar spent on physicians must be equal to the marginal productivity per dollar spent on nurses.

Accepted Answer

A) True 
 B)False

Question 15

Assuming that a hospital seeks to minimize total costs, what should it do if the marginal productivity per dollar spent on nurses is less than the marginal productivity per dollar spent on physicians?

Accepted Answer

A)  The hospital should utilize more nurses and fewer physicians. 
B)  The hospital should utilize fewer nurses and more physicians. 
C)  The hospital should utilize fewer nurses and fewer physicians. 
D)  The hospital should utilize more nurses and more physicians. 
E)  There is not enough information to determine the appropriate action. 
A)  The hospital should utilize more nurses and fewer physicians. 
B)  The hospital should utilize fewer nurses and more physicians. 
C)  The hospital should utilize fewer nurses and fewer physicians. 
D)  The hospital should utilize more nurses and more physicians. 
E)  There is not enough information to determine the appropriate action.

Previously paid sunk costs do not factor into most decisions since they can't be recouped.

Short-run average variable costs decrease initially, but then begin to rise due to diminishing marginal productivity of labor.

_______ occur when the cost of producing a medical service decreases as the quantity produced increases.

The _______ of nurses is represented as the change in medical services provided by an additional unit of nurse-labor.

Which of the following best explains why production might increase at a decreasing rate with the addition of a variable input?

_______ reflect the alternatives given up by using resources to produce medical services.

If a hospital is experiencing diseconomies of scale, it can reduce the average total cost of production by producing a greater quantity of medical services.

In the short run, the average fixed cost of production _ as the quantity of medical services _.

If the marginal product is greater than the average product of physicians, then the average product of physicians must be increasing.

If the average product of dental assistants is _, then the marginal product of that labor must be _ its average product.

In the short run, if the marginal cost of production is equal to the average total cost of production, then the average total cost is _______.

_______ occur when the cost of producing two outputs is less than the sum of the costs incurred when producing each output individually.

The _______ of nurses is represented as the total amount of medical services produced divided by the total amount of nurse-labor.

If a hospital is cost-minimizing, then the marginal productivity per dollar spent on physicians must be equal to the marginal productivity per dollar spent on nurses.

Assuming that a hospital seeks to minimize total costs, what should it do if the marginal productivity per dollar spent on nurses is less than the marginal productivity per dollar spent on physicians?

Introduction

Health and Medical Care: an Economic Perspective

Cost and Benefit Analysis

Health Care Systems and Institutions

The Demand for Medical Care

The Demand for Medical Insurance: Traditional and Managed Care Coverage

Structure, Conduct, Performance, and Market Analysis

Government, Health, and Medical Care

Government As Health Insurer

The Private Health Insurance Industry

The Physician Services Industry

The Hospital Services Industry

The Pharmaceutical Industry

The Long-Term Care Industry

Health Insurance Reform

Filters

Exam 7: Medical Care Production and Costs

Previously paid sunk costs do not factor into most decisions since they can't be recouped.

Short-run average variable costs decrease initially, but then begin to rise due to diminishing marginal productivity of labor.

_______ occur when the cost of producing a medical service decreases as the quantity produced increases.

The _______ of nurses is represented as the change in medical services provided by an additional unit of nurse-labor.

Which of the following best explains why production might increase at a decreasing rate with the addition of a variable input?

_______ reflect the alternatives given up by using resources to produce medical services.

If a hospital is experiencing diseconomies of scale, it can reduce the average total cost of production by producing a greater quantity of medical services.

In the short run, the average fixed cost of production _______ as the quantity of medical services _______.

If the marginal product is greater than the average product of physicians, then the average product of physicians must be increasing.

If the average product of dental assistants is _______, then the marginal product of that labor must be _______ its average product.

In the short run, if the marginal cost of production is equal to the average total cost of production, then the average total cost is _______.

_______ occur when the cost of producing two outputs is less than the sum of the costs incurred when producing each output individually.

The _______ of nurses is represented as the total amount of medical services produced divided by the total amount of nurse-labor.

If a hospital is cost-minimizing, then the marginal productivity per dollar spent on physicians must be equal to the marginal productivity per dollar spent on nurses.

Assuming that a hospital seeks to minimize total costs, what should it do if the marginal productivity per dollar spent on nurses is less than the marginal productivity per dollar spent on physicians?

Introduction

Health and Medical Care: an Economic Perspective

Cost and Benefit Analysis

Health Care Systems and Institutions

The Demand for Medical Care

The Demand for Medical Insurance: Traditional and Managed Care Coverage

Structure, Conduct, Performance, and Market Analysis

Government, Health, and Medical Care

Government As Health Insurer

The Private Health Insurance Industry

The Physician Services Industry

The Hospital Services Industry

The Pharmaceutical Industry

The Long-Term Care Industry

Health Insurance Reform

Filters

In the short run, the average fixed cost of production _ as the quantity of medical services _.

If the average product of dental assistants is _, then the marginal product of that labor must be _ its average product.