Question 1

A change in the following factor will cause a movement along a given supply curve.&#10;A) Price&#10;B) Technology&#10;C) Government subsidies&#10;D) B and C

Accepted Answer

A change in price will cause a movement along a given supply curve, as it directly affects the quantity supplied. Changes in technology or government subsidies would shift the supply curve itself.

Question 2

A factor that causes the marginal cost curve to shift upward will result in:&#10;A) An increase in supply&#10;B) An increase in quantity supplied&#10;C) A decrease in supply&#10;D) A decrease in quantity supplied

Accepted Answer

An upward shift in the marginal cost curve indicates higher production costs, leading to a decrease in supply as producers are less willing to supply the same quantity at previous prices.

Question 3

The critical price below which the firm will shut down depends on which costs of the firm?&#10;A) Variable costs&#10;B) Fixed costs&#10;C) Indirect costs&#10;D) A and B

Accepted Answer

The critical price below which a firm will shut down in the short run is determined by its variable costs, as the firm needs to cover at least these costs to continue operating.

Question 4

If the number of suppliers in the market increases, the supply curve will&#10;A) Shift inward&#10;B) Shift outward&#10;C) Remain stationary&#10;D) Bend backwards

Accepted Answer

An increase in the number of suppliers means that there are more producers of the good or service, which will lead to an increase in the quantity supplied at each price level. This will shift the supply curve to the right, or outward.

Question 5

Members of the management triangle include&#10;A) Hospital trustees&#10;B) Physicians&#10;C) Administrators&#10;D) A and C only&#10;E) A, B, and C

Accepted Answer

The management triangle includes hospital trustees, physicians, and administrators, who work together to manage the hospital.

Question 6

For the supply of a normal good or service, there is an inverse relationship between price and quantity.

Accepted Answer

For a normal good or service, there is a direct relationship between price and quantity supplied; as price increases, the quantity supplied typically increases.

Question 7

If the government increases taxes, the producer would need to receive a higher price for each unit produced.

Accepted Answer

When taxes increase, producers face higher costs, which may lead them to raise prices to maintain their profit margins.

Question 8

The profit-maximizing point for suppliers in a competitive market is where MR = MC.

Accepted Answer

In a competitive market, suppliers maximize profit where marginal revenue (MR) equals marginal cost (MC), as this is the point where the cost of producing an additional unit equals the revenue gained from selling it.

Question 9

In general, a firm will stop production when the price no longer covers its fixed costs.

Accepted Answer

A firm will stop production when the price no longer covers its variable costs, not fixed costs, as fixed costs are incurred regardless of production levels.

Question 10

A tax-exempt hospital will tend to provide care of a higher quality level.

Accepted Answer

A tax-exempt hospital is not subject to the same financial pressures as a for-profit hospital, so it can afford to provide care of a higher quality level.

Question 11

A hospital's medical staff is a self-governing organization that typically has the responsibility for performing peer-review activities.

Accepted Answer

The answer of A hospital's medical staff is a self-governing...

Question 12

Generally, markups (charge-to-cost ratios) for ancillary services were found to be lower than basic room charges in hospitals.

Accepted Answer

The answer of Generally, markups (charge-to-cost ratios) for ancillary services...

Question 13

Given the supply curve for radiographs by a radiology practice, predict how this curve will shift (supply will increase or decrease), if the following occur:
a decrease in the wages of radiological technicians
an increase in productivity
an increase in the wages of technicians
a decrease in the number of patients with multiple and rare problems

Accepted Answer

The answer of Given the supply curve for radiographs by...

Question 14

Given the following cost schedule for a regional hospital that seeks to maximize its profits, answer the following three questions:

If the price per day is $440, what is the quantity supplied?
If the price per day increases to $640, what is the quantity supplied?
If the price per day is $900, what is the quantity supplied?

Accepted Answer

The answer of Given the following cost schedule for a...

Question 15

A clinic receives a per-visit payment of $40. It has an upward sloping supply curve. Indicate the net effect on the quantity of visits supplied if the following occurs:
A) The wage rates for the clinic nursing staff increase.
B) The fixed overhead costs (rent, electricity) increase.
C) The clinic patients become sicker.
D) The clinic increases productivity.
E) The clinic decides to increase "quality" (defined as a more thorough examination for each patient.

Accepted Answer

The answer of A clinic receives a per-visit payment of...

Deck 6: Behavior of Supply