These Q about Healthcare Economics

True or False Questions

1. Hospitals are health care firms that earn revenues from selling some health care resources. 2. Physician clinics are health care firms that earn revenues from producing and selling some type of medical output. 3. Pharmaceutical companies are health care firms that earn revenues from producing and selling some type of medical output. 4. The short-run production function for health care services indicates the level of medical services is a function of a variable physician input only. 5. The short-run production function for health care services indicates the level of medical services is a function of a variable physician input and a fixed capital input only. 6. The long-run production function for health care services indicates the level of medical services is a function of a variable physician input and a fixed capital input. 7. The long-run production function for health care services indicates the level of medical services is a function of a variable physician input and a variable capital input. 8. Law of diminishing marginal productivity explains the production behavior and states of total output in a health care firm. 9. Law of diminishing marginal productivity explains the production possibilities curve (PPC). 10. At the first stage of the production function in a health care firm, total output increases at an increasing rate. 11. At the second stage of the production function in a health care firm, total output increases at an increasing rate. 12. At the second stage of the production function in a health care firm, average output is bigger than marginal. 13. At the third stage of the production function in a healthcare firm, total output begins to decline. 14. In a health care firm, marginal product equals average product at the end of the first phase of the law of diminishing marginal productivity. 15. In a health care firm, marginal product equals zero at the end of the second phase of the law of diminishing marginal productivity. 16. In the first stage of productivity, there is disguised unemployment among physicians and other variable inputs that work in a health care firm. 17. In the third stage of productivity, there is disguised unemployment in medical equipment and other fixed inputs that work in a health care firm. 18. At the third stage of the production function, average product is negative. 19. The synergy effect explains the law of increasing opportunity cost in a health care firm. 20. The synergy effect explains the law of diminishing marginal productivity in a health care firm. 21. In the second phase of production, marginal product equals 23 and average product equals 22.

Multiple Choice Questions

1. Average product in a health care firm equals: A. Total number of patients that the medical firm produces healthcare services for them. B. Total product number of physicians. C. Change in total product change in number of physicians. D. All of the above are true. 2. Marginal product in a health care firm equals: A. Total number of patients that the medical firm produces healthcare services for them. B. Total product number of physicians. C. Change in total product change in number of physicians. D. All of the above are true. 3. Medical productive firms include: A. Hospitals. B. Physician clinics. C. Pharmaceutical companies. D. All of the above are true. 4. Medical productive firms include: A. Hospitals. B. Nursing homes. C. Pharmaceutical companies. D. All of the above are true. 5. Medical productive firms include: A. Medical factories. B. Beauty salons. C. Pharmaceutical companies. D. All of the above are true. 6. The short-run production function for health care services indicates the level of medical services is a function of: A. A variable physician input. B. A fixed capital input. C. A variable physician input and a fixed capital input. D. All of the above are wrong. 7. Law of diminishing marginal productivity explains the production behavior and states that total output at first: A. Increases at an increasing rate. B. Increases at a decreasing rate. C. Total product begins to decline. D. All of the above are wrong. 8. Law of diminishing marginal productivity explains the production behavior and states that total output at the second phase: A. Increases at an increasing rate. B. Increases at a decreasing rate. C. Total product begins to decline. D. All of the above are true. 9. Short run stages of production in a health care firm include: A. Stage of increase returns only. B. Stage of decrease returns only. C. Stage of negative returns only. D. All of the above are true. 10. At the stage of negative returns in the health care production function, there is disguised unemployment in: A. Physicians. B. Other variable inputs. C. Other fixed inputs. D. A + B. 11. At the stage of increased returns in the health care production function, there is disguised unemployment in: A. Medical equipment. B. Other variable inputs. C. Other fixed inputs. D. A + C. 12. At the stage of increased returns in the health care production function, there is disguised unemployment in: A. Physicians. B. Other variable inputs. C. Beds. D. A + C. 13. The "synergy effect" in a medical firm means that physicians: A. Work cooperatively as a team. B. Work under labor specialization. C. Work separately. D. A + B. 14. In the stage of increased returns of the law of diminishing marginal productivity in a health care firm: A. Total output increases at a decreasing rate. B. Average product decreases. C. Marginal product is negative. D. AP < MP. 15. In the stage of decreased returns of the law of diminishing marginal productivity in a medical firm: A. Total output increases at an increasing rate. B. Average product increases. C. Marginal product is negative. D. AP > MP.

True or False Questions

1. Explicit cost reflects the opportunity costs of using any resources the medical firm owns. 2. Implicit cost reflects any costs paid to others for using their resources in producing health care services. 3. Accountants consider only explicit costs of doing business when determining the accountant profits in a health care firm. 4. Accountants consider only explicit costs of doing business when determining the economic profits in a health care firm. 5. Economists consider only explicit costs of doing business when determining the economic profits in a health care firm. 6. Economists consider both explicit and implicit costs of doing business when determining the economic profits in a health care firm. 7. Economists consider both explicit and implicit costs of doing business when determining the accountant profits in a health care firm. 8. Explicit costs are easily quantified because a recent transaction is available to determine the cost of using resources in health care production. 9. Implicit costs are easily quantified because a recent transaction is not available to determine the cost of using resources in health care production. 10. Implicit cost equals the forgone rental payments reflecting the opportunity costs of using the physical assets owned by the health care firm. 11. A general practitioner (GP) who owns the physical assets (such as the clinic and medical equipment) used in producing physician services is an example of explicit cost. 12. Electricity utility bills are explicit costs in a health care firm. 13. Medical supply expenses are implicit costs in a health care firm. 14. Fixed costs do not respond to changes in the level of output in a health care firm. 15. Variable costs do not respond to changes in the level of output in a health care firm. 16. Total costs respond to changes in the level of output in a health care firm. 17. Total costs equal fixed costs at the level of output zero in a health care firm.

Multiple Choice Questions

1. Wage payments to the medical staff in a health care firm are: A. Explicit costs. B. Implicit costs. C. Fixed costs. D. Semi-variable costs. 2. The share of the recent year from the costs of equipment in a health care firm are: A. Variable costs. B. Implicit costs. C. Fixed costs. D. Semi-variable costs. 3. Total costs in a health care firm include: A. Fixed costs. B. Variable costs. C. Near variable costs. D. All of the above are true. 4. The costs which respond to changes in the level of output in a health care firm are: A. Fixed costs. B. Variable costs. C. Near variable costs. D. All of the above are true. 5. Total costs in a health care firm increase first at: A. An increasing rate. B. A decreasing rate. C. A fixed rate. D. All of the above are wrong.

True or False Questions

1. Explicit cost reflects the opportunity costs of using any resources the medical firm owns. 2. Implicit cost reflects any costs paid to others for using their resources in producing health care services. 3. Accountants consider only explicit costs of doing business when determining the accountant profits in a health care firm. 4. Accountants consider only explicit costs of doing business when determining the economic profits in a health care firm. 5. Economists consider only explicit costs of doing business when determining the economic profits in a health care firm. 6. Economists consider both explicit and implicit costs of doing business when determining the economic profits in a health care firm. 7. Economists consider both explicit and implicit costs of doing business when determining the accountant profits in a health care firm. 8. Explicit costs are easily quantified because a recent transaction is available to determine the cost of using resources in health care production. 9. Implicit costs are easily quantified because a recent transaction is not available to determine the cost of using resources in health care production. 10. Implicit cost equals the forgone rental payments reflecting the opportunity costs of using the physical assets owned by the health care firm. 11. A general practitioner (GP) who owns the physical assets (such as the clinic and medical equipment) used in producing physician services is an example of explicit cost. 12. Electricity utility bills are explicit costs in a health care firm. 13. Medical supply expenses are implicit costs in a health care firm. 14. Fixed costs do not respond to changes in the level of output in a health care firm. 15. Variable costs do not respond to changes in the level of output in a health care firm. 16. Total costs respond to changes in the level of output in a health care firm. 17. Total costs equal fixed costs at the level of output zero in a health care firm.

Multiple Choice Questions

1. Wage payments to the medical staff in a health care firm are: A. Explicit costs. B. Implicit costs. C. Fixed costs. D. Semi-variable costs. 2. The share of the recent year from the costs of equipment in a health care firm are: A. Variable costs. B. Implicit costs. C. Fixed costs. D. Semi-variable costs. 3. Total costs in a health care firm include: A. Fixed costs. B. Variable costs. C. Near variable costs. D. All of the above are true. 4. The costs which respond to changes in the level of output in a health care firm are: A. Fixed costs. B. Variable costs. C. Near variable costs. D. All of the above are true. 5. Total costs in a health care firm increase first at: A. An increasing rate. B. A decreasing rate. C. A fixed rate. D. All of the above are wrong.

Continuation Questions

1. If total revenues equal 5000 SR, fixed costs equal 2500 SR and variable costs equal 2000 SR, the firm will continue in operation. 2. If total revenues equal 5000 SR, fixed costs equal 2500 SR and variable costs equal 4000 SR, the firm will continue in operation. 3. If total revenues equal 5000 SR, fixed costs equal 2500 SR and variable costs equal 2500 SR, the firm will continue in operation. 4. If total revenues equal 5000 SR, fixed costs equal 2500 SR and variable costs equal 7500 SR, the firm will continue in operation. 5. If total revenues equal 5000 SR, fixed costs equal 2500 SR and variable costs equal 7600 SR, the firm will continue in operation.

Multiple Choice Continuation Questions

1. In a health care firm, if fixed costs equal 500 SR, variable costs equal 600 SR, and total revenue equals 700 SR, then there was: A. Profits. B. Loss > FC. C. Loss < FC. D. Loss = FC. 2. In a health care firm, if fixed costs equal 500 SR, variable costs equal 600 SR, and total revenue equals 450 SR, then the firm: A. Continuing in operation with acceptable loss. B. Continuing in operation with profits. C. Closed. D. All of the above are wrong. 3. In a health care firm, if fixed costs equal 500 SR, variable costs equal 600 SR, and total revenue equals 1100 SR, then the firm: A. Continuing in operation with acceptable loss. B. Operating at Break Even Point. C. Closed. D. All of the above are wrong.