MHA 710 Test 3 Study guide Exam Questions
and Answers with Verified Solutions | Latest
Updated 2026
Economies of scale exist when: b. long-run average costs decline as
a. long-run average costs increase output
as increases
output increases. Economies of scale refers to a situation in
b. long-run average costs decline a
as production process where long-run
output increases. average cost
c. short-run average costs declines as output expands.
increase. Efficiency-improving
d. long-run average costs are expansion leads to a number of technical
constant. advantages: increased purchasing power
e. short-run average costs decline. along
with specialization and division of labor to
improve
productivity. This creates the ability to
lower the
per-unit cost of production.
,What is the most significant cost of c.
attending medical school? The income foregone
a. Even with the median educational debt of
Books and incidentals medical
b. students approaching $200,000, the most
Tuition and fees significant cost of attending medical school
c. is the
The income foregone income the medical students could have
d. earned if
Room and board they entered the labor force after earning a
college degree. A minimum of seven years
of
foregone income (four years of medical
school and
a minimum of three years in a residency
program)
would easily add up to over $425,000.
,The rate of return on an b.
investment is inversely related to the length of time
in medical education: spent in
a. formal schooling
is inversely related to income. This may seem contradictory at first glance
b. because the rate of return on a specialty
is inversely related to the length of education
time spent in formal schooling is higher than that of general practice
c. physicians. If
will increase with an increase in you stop looking at that point, you miss the
the bigger
availability of student loans. picture of diminishing returns. The added
d. time
is much higher than the rate of spent in school will add to total foregone
return income.
on an undergraduate business Four additional years pursuing a
degree. cardiology
e. fellowship means giving up potential
is inversely related to the number earnings of
of $800,000 to $1 million in internal medicine.
years in the profession. College
graduates in business and law realize
higher rates
of return on their shorter educat
, Which of the following statements c.
is The ability to cost shift depends on a
true about cost shifting in hospital's
hospitals? payer mix.
a. While empirical evidence measuring cost
Classic Ramsey pricing can be shifting is
interpreted in different ways, inconclusive, Wu (2010) tested two
leading alternative
researchers into arguing that if it explanations-the market power approach
looks like cost shifting, it probably and the
is strategic approach-and concluded that
cost shifting. hospitals
b. with a more favorable payer mix (a larger
Capacity-constrained medical proportion of private payers) were able to
providers are not able to cost shift. shift
c. more of the costs to private payers. On
The ability to cost shift depends on average,
a hospitals are able to shift a relatively small
hospital's payer mix. percentage of the public-payer shortfall (21
d. percent).
The positive correlation coefficient
between cost-to-payment ratios for
various payers indicates that cost
shifting is taking place.
e.
Regardless of payer mix, hospitals
are taking full advantage of their
bargaining power with payers who
are able to cost shift.
and Answers with Verified Solutions | Latest
Updated 2026
Economies of scale exist when: b. long-run average costs decline as
a. long-run average costs increase output
as increases
output increases. Economies of scale refers to a situation in
b. long-run average costs decline a
as production process where long-run
output increases. average cost
c. short-run average costs declines as output expands.
increase. Efficiency-improving
d. long-run average costs are expansion leads to a number of technical
constant. advantages: increased purchasing power
e. short-run average costs decline. along
with specialization and division of labor to
improve
productivity. This creates the ability to
lower the
per-unit cost of production.
,What is the most significant cost of c.
attending medical school? The income foregone
a. Even with the median educational debt of
Books and incidentals medical
b. students approaching $200,000, the most
Tuition and fees significant cost of attending medical school
c. is the
The income foregone income the medical students could have
d. earned if
Room and board they entered the labor force after earning a
college degree. A minimum of seven years
of
foregone income (four years of medical
school and
a minimum of three years in a residency
program)
would easily add up to over $425,000.
,The rate of return on an b.
investment is inversely related to the length of time
in medical education: spent in
a. formal schooling
is inversely related to income. This may seem contradictory at first glance
b. because the rate of return on a specialty
is inversely related to the length of education
time spent in formal schooling is higher than that of general practice
c. physicians. If
will increase with an increase in you stop looking at that point, you miss the
the bigger
availability of student loans. picture of diminishing returns. The added
d. time
is much higher than the rate of spent in school will add to total foregone
return income.
on an undergraduate business Four additional years pursuing a
degree. cardiology
e. fellowship means giving up potential
is inversely related to the number earnings of
of $800,000 to $1 million in internal medicine.
years in the profession. College
graduates in business and law realize
higher rates
of return on their shorter educat
, Which of the following statements c.
is The ability to cost shift depends on a
true about cost shifting in hospital's
hospitals? payer mix.
a. While empirical evidence measuring cost
Classic Ramsey pricing can be shifting is
interpreted in different ways, inconclusive, Wu (2010) tested two
leading alternative
researchers into arguing that if it explanations-the market power approach
looks like cost shifting, it probably and the
is strategic approach-and concluded that
cost shifting. hospitals
b. with a more favorable payer mix (a larger
Capacity-constrained medical proportion of private payers) were able to
providers are not able to cost shift. shift
c. more of the costs to private payers. On
The ability to cost shift depends on average,
a hospitals are able to shift a relatively small
hospital's payer mix. percentage of the public-payer shortfall (21
d. percent).
The positive correlation coefficient
between cost-to-payment ratios for
various payers indicates that cost
shifting is taking place.
e.
Regardless of payer mix, hospitals
are taking full advantage of their
bargaining power with payers who
are able to cost shift.
