Deck 5: Healthcare Production and Costs

Question 1

The additional production yielded by the use of one extra unit of variable input is called

A) the average product
B) the fixed product
C) the marginal product
D) the variable product

Answer 1

C

Question 2

The cost curve that is made up of the minimum cost points at each output level is called the:

A) Long-run average cost curve
B) Short run average cost curve
C) Long run total cost curve
D) Short-run total cost curve

Answer 2

A

Question 3

A normal return on investment associated with the risk taken is called

A) economic profit
B) normal profit
C) excess profit
D) "sunk" profit

Answer 3

B

Question 4

Total costs divided by total output is a measure of

A) marginal costs
B) fixed costs
C) average costs
D) incremental costs

Question 5

The savings derived from producing different products jointly/simultaneously in the same production unit is called

A) economies of scale
B) technical efficiency
C) allocative efficiency
D) economies of scope

Question 6

Technology is a way of transforming inputs into outputs.

Question 7

Only finished goods and services are considered to be outputs.

Question 8

The production function gets flatter as total production decreases.

Question 9

The marginal rate of substitution reflects how much input A will need to be increased to offset a decrease in a unit of input B.

Question 10

Opportunity cost reflects the value of the next highest-valued use that must be foregone when resources are used to undertake the selected activity.

Question 11

Total fixed costs plotted on a graph is represented by an upward sloping line.

Question 12

The total cost curve is the vertical sum of the two curves total variable cost and total fixed cost.

Question 13

Given the production function between nurse hours and patient visits per day in a community clinic, how will each of the following shift this function:
a) A change in nurse remuneration from salary to fee for service
b) A change in policy to provide more thorough examinations
c) An increase in nurse wages
d) An increase in the severity of the patients treated.

Question 14

The May Clinic rents a small office in Columbia. May pays the building owner a rent of $12,000 a month, which includes all utilities. It has signed a three-year lease. May hires a general practice physician at $300 an hour, a nurse at $90 an hour, and a secretary at $60 an hour. May assumes that each patient uses $60 in supplies. In September, the clinic was open for 400 hours, during which all personnel were available at all times to staff the clinic. During that time, 6,000 patients were seen. What were May's fixed, variable, and total costs for the month?.

Question 15

Sweetgrass Radiology Labs has a fixed amount of radiology equipment. The laboratory can hire any number of radiology technicians per hour to produce radiographs, which are displayed on a screen. The relationship between the number of technicians hired per hour and the number of radiographs produced per hour is shown in the following table. Show the total and marginal products and indicate at each level of production whether the production function exhibits increasing, constant, or diminishing marginal productivity.