Deck 4: Output Forecasts and Revenue Budgets

Question 1

The lean waste of over processing focuses on

A) Producing unneeded or unwanted goods and services
B) Using too many steps or building in too many features into a good or service
C) Holding an excessive amount of supplies
D) Failure to assign staff to duties they are capable of completing
E) Allowing staff or other resources to be idle

Answer 1

B

Question 2

The most important variable that must be estimated to create a budget is

A) Output
B) Output price
C) Average variable cost
D) Total fixed cost

Answer 2

A

Question 3

A durable good is

A) A product with an expected life of less than one year
B) A product with an expected life of more than one year
C) A product with an expected life of more than five years
D) A non-physical product

Answer 3

B

Question 4

Which of the following personal consumption expenditures demonstrates the least variability?

A) Durable goods
B) Non-durable goods
C) Services
D) Residential housing

Question 5

Which of the following types of care typically demonstrate the least variability?

A) Curative care
B) Chronic care
C) Preventive care
D) Cosmetic care

Question 6

The forecasting method that bases estimates on the relationship between two variables, i.e., the amount of one variable is based on the amount of a different variable, is

A) Compound growth rates
B) Moving average
C) Exponential smoothing
D) Regression

Question 7

The formula used to create a moving average forecast is

A) Y = (Y-1+Y-2+Y-3)/3
B) Y = α*Y-1actual + (1-α)*Y-1budget
C) r = (X/Y)(1/n)-1
D) Y = α + (β*X)

Question 8

In a regression forecast, β indicates

A) The change in the dependent forecast variable due to a one unit change in the independent variable
B) The value of the dependent forecast variable when the independent variable is zero
C) The change in the independent variable due to a one unit change in the dependent forecast variable
D) The value of the independent variable when the dependent forecast variable is zero

Question 9

Producers operating within which type of markets have the greatest control over the price of their product?

A) Perfect competition
B) Monopolistic competition
C) Oligopoly
D) Monopoly

Question 10

Producers in which type of market have the least control over the price of their product?

A) Perfect competition
B) Monopolistic competition
C) Oligopoly
D) Monopoly

Question 11

Which of the following will reduce the price elasticity of a good or service?

A) The item is a luxury rather than a necessity
B) The item comprises a small percentage of a purchaser's budget
C) Changes to behavior can be completed in a short period of time
D) The item has many close substitutes

Question 12

In response to a price increase, the quantity of an inelastic product sold will

A) Decrease by more than the percentage change in price
B) Decrease by approximately the same percentage change in price
C) Decrease by less than the percentage change in price
D) Increase by less than the percentage change in price

Question 13

If price is increased, the total revenue generated by a product with elastic demand

A) Will increase
B) Will decrease
C) Will remain the same
D) Cannot be determined

Question 14

If price elasticity for a product equals -0.75, the demand for it is

A) Elastic
B) Unitary elastic
C) Inelastic
D) Rigidly elastic

Question 15

A price reduction will increase total revenue if the demand for a product is

A) Elastic
B) Unitary elastic
C) Inelastic
D) Sub-elastic

Question 16

Which of the following types of healthcare services has demonstrated the greatest variability in demand over time?

A) Inpatient discharges
B) Physician visits
C) Long-term care services
D) Cosmetic surgery

Question 17

Which of the following reimbursement systems is most advantageous, i.e., provides the institution with the greatest latitude over its revenue, to a hospital?

A) Percent of charge
B) Per case
C) Per diem
D) Capitation
E) Cost

Question 18

Which of the following reimbursement systems provides an incentive to reduce hospital admissions?

A) Percent of charge
B) Per case
C) Per diem
D) Capitation
E) Cost

Question 19

Which of the following reimbursement systems provides an incentive to reduce the length of stay of hospital admissions?

A) Percent of charge and cost
B) Cost and per case
C) Per case and per diem
D) Per diem and capitation

Question 20

Which of the following reimbursement systems allow hospitals to increase their profitability by increasing prices?

A) Percent of charge
B) Per case
C) Per diem
D) Capitation
E) Cost

Question 21

The most important variable in a budget is the estimate of total revenue.

Question 22

The revenue budget is completely dependent on the output forecast and estimate of output prices.

Question 23

Sales of durable goods are more dependent on the overall economic climate than either non-durables goods or services.

Question 24

Diagnostic related groups (DRGs) summarize medical treatments by body system.

Question 25

The primary assumption of a composite forecast that gives equal weight to each forecasting method is no method is more accurate than another.

Question 26

The primary assumption quantitative forecasting methods make is future demand can be determined by examining history.