1 Illustrate the trade-off between administrators and medical staff using an isoquant/isocost graph. Explain the economic principles involved in obtaining an optimal situation. How would this situation be affected by an increase in the pay of doctors and nurses?

2 What problems might be encountered in determining this solution in practical terms?

3 Illustrate the hospital-versus-hospital trade-off using an isoquant/isocost graph and explaining the economic principles involved in obtaining an optimal situation. In what important respects does this issue differ from the issue in the previous question?