MHA 710 HEALTHCARE ECONOMICS END OF
COURSE EXAM 2026 QUESTIONS AND ANSWERS
SURE A+
✔✔Economies of scale exist when:
a. long-run average costs decline as output increases.
b. long-run average costs increase as output increases.
c. long-run average costs are constant.
d. short-run average costs decline.
e. short-run average costs increase. - ✔✔a. long-run average costs decline as output
increases.
✔✔Which of the following statements about the distribution of physicians among
specialties is true in the United States?
a. There are twice as many generalists as there are specialists.
b. The majority of physicians specialize in general/family practice.
c. There are twice as many specialists as there are generalists.
d. The specialty distribution in the United States is similar to that of the rest of the world.
- ✔✔c. There are twice as many specialists as there are generalists.
✔✔Starting salaries for female obstetricians/gynecologists are higher than those of
male obstetricians/gynecologists . What is the best explanation for this?
,a. There are more males in obstetrics/gynecology residency programs than females.
b. The demand for female obstetricians/gynecologists is greater than the demand for
male obstetricians/gynecologists .
c. The demand for female obstetricians/gynecologists is less than the demand for male
obstetricians/gynecologists .
d. Female obstetricians/gynecologists have more human capital than male
obstetricians/gynecologists . - ✔✔b. The demand for female obstetricians/gynecologists
is greater than the demand for male obstetricians/gynecologists .
✔✔The rate of return on an investment in medical education:
a. will increase with an increase in the availability of student loans.
b. is inversely related to the number of years in the profession.
c. is much higher than the rate of return on an undergraduate business degree.
d. is inversely related to income.
e. is inversely related to the length of time spent in formal schooling - ✔✔e. is inversely
related to the length of time spent in formal schooling
✔✔Suppose the market for nursing services in a local community is so dominated by a
single community hospital that, for all practical purposes, it is considered a monopsony.
Using the diagram below, answer the question.
What is the equilibrium wage and level of employment under monopsony?
a. W0 and E1
b. W2 and E0
c. W0 and E0
d. W0 and E2
e. W1 and E1 - ✔✔c. W0 and E0
✔✔The following diagram depicts the market for physicians' services that is originally in
equilibrium at the point where demand and supply (D0 and S0) intersect. As physician
supply increases from S0 to S1, an even larger concurrent shift in demand from D0 to
D1:
a. will increase demand for physicians' services, but not spending.
b. will cause overall spending on physicians' services to increase.
c. will result in a new equilibrium at P2 and Q2.
d. will result in a decrease in the price of physicians' services.
e. will force physicians to limit the number of patients they see. - ✔✔a. will increase
demand for physicians' services, but not spending.
✔✔The merger of two community hospitals located in the same geographic market is
called:
a. a conglomerate merger.
b. a leveraged buyout.
, c. horizontal integration.
d. vertical integration.
e. a real shame, as one of the hospitals will likely close. - ✔✔c. horizontal integration.
✔✔The expanded use of prospective payment in hospitals has changed the nature of
competition in that market. Which of the following statements is true?
a. After an initial drop in operating margins shortly after the introduction of diagnosis-
related groups (DRGs), Medicare margins have improved and most hospitals are
generating 5-8 percent surpluses on all their Medicare business.
b. The switch to diagnosis-related group payments in the 1980s has actually had little
effect on competition because so much of hospital spending comes from the federal
government.
c. Savings from prospective payments are substantial and due primarily to fewer
hospital admissions and shorter hospital stays.
d. Because patients pay such a small percentage of hospital bills, prospective payment
has had little effect on hospital operations. - ✔✔c. Savings from prospective payments
are substantial and due primarily to fewer hospital admissions and shorter hospital
stays.
✔✔Suppose the market for nursing services in a local community is so dominated by a
single community hospital that, for all practical purposes, it is considered a monopsony.
Using the diagram below, answer the question.
If the market were perfectly competitive instead of dominated by a monopsonist, what
would the equilibrium wage and level of employment be?
a. W2 and E0
b. W0 and E1
c. W0 and E0
d. W0 and E2
e. W1 and E1 - ✔✔e. W1 and E1
✔✔Which of the following statements is true about cost shifting in hospitals?
a. Regardless of payer mix, hospitals are taking full advantage of their bargaining power
with payers who are able to cost shift.
b. Capacity-constrained medical providers are not able to cost shift.
c. The positive correlation coefficient between cost-to-payment ratios for various payers
indicates that cost shifting is taking place.
d. The ability to cost shift depends on a hospital's payer mix.
e. Classic Ramsey pricing can be interpreted in different ways, leading researchers into
arguing that if it looks like cost shifting, it probably is cost shifting. - ✔✔d. The ability to
cost shift depends on a hospital's payer mix.
COURSE EXAM 2026 QUESTIONS AND ANSWERS
SURE A+
✔✔Economies of scale exist when:
a. long-run average costs decline as output increases.
b. long-run average costs increase as output increases.
c. long-run average costs are constant.
d. short-run average costs decline.
e. short-run average costs increase. - ✔✔a. long-run average costs decline as output
increases.
✔✔Which of the following statements about the distribution of physicians among
specialties is true in the United States?
a. There are twice as many generalists as there are specialists.
b. The majority of physicians specialize in general/family practice.
c. There are twice as many specialists as there are generalists.
d. The specialty distribution in the United States is similar to that of the rest of the world.
- ✔✔c. There are twice as many specialists as there are generalists.
✔✔Starting salaries for female obstetricians/gynecologists are higher than those of
male obstetricians/gynecologists . What is the best explanation for this?
,a. There are more males in obstetrics/gynecology residency programs than females.
b. The demand for female obstetricians/gynecologists is greater than the demand for
male obstetricians/gynecologists .
c. The demand for female obstetricians/gynecologists is less than the demand for male
obstetricians/gynecologists .
d. Female obstetricians/gynecologists have more human capital than male
obstetricians/gynecologists . - ✔✔b. The demand for female obstetricians/gynecologists
is greater than the demand for male obstetricians/gynecologists .
✔✔The rate of return on an investment in medical education:
a. will increase with an increase in the availability of student loans.
b. is inversely related to the number of years in the profession.
c. is much higher than the rate of return on an undergraduate business degree.
d. is inversely related to income.
e. is inversely related to the length of time spent in formal schooling - ✔✔e. is inversely
related to the length of time spent in formal schooling
✔✔Suppose the market for nursing services in a local community is so dominated by a
single community hospital that, for all practical purposes, it is considered a monopsony.
Using the diagram below, answer the question.
What is the equilibrium wage and level of employment under monopsony?
a. W0 and E1
b. W2 and E0
c. W0 and E0
d. W0 and E2
e. W1 and E1 - ✔✔c. W0 and E0
✔✔The following diagram depicts the market for physicians' services that is originally in
equilibrium at the point where demand and supply (D0 and S0) intersect. As physician
supply increases from S0 to S1, an even larger concurrent shift in demand from D0 to
D1:
a. will increase demand for physicians' services, but not spending.
b. will cause overall spending on physicians' services to increase.
c. will result in a new equilibrium at P2 and Q2.
d. will result in a decrease in the price of physicians' services.
e. will force physicians to limit the number of patients they see. - ✔✔a. will increase
demand for physicians' services, but not spending.
✔✔The merger of two community hospitals located in the same geographic market is
called:
a. a conglomerate merger.
b. a leveraged buyout.
, c. horizontal integration.
d. vertical integration.
e. a real shame, as one of the hospitals will likely close. - ✔✔c. horizontal integration.
✔✔The expanded use of prospective payment in hospitals has changed the nature of
competition in that market. Which of the following statements is true?
a. After an initial drop in operating margins shortly after the introduction of diagnosis-
related groups (DRGs), Medicare margins have improved and most hospitals are
generating 5-8 percent surpluses on all their Medicare business.
b. The switch to diagnosis-related group payments in the 1980s has actually had little
effect on competition because so much of hospital spending comes from the federal
government.
c. Savings from prospective payments are substantial and due primarily to fewer
hospital admissions and shorter hospital stays.
d. Because patients pay such a small percentage of hospital bills, prospective payment
has had little effect on hospital operations. - ✔✔c. Savings from prospective payments
are substantial and due primarily to fewer hospital admissions and shorter hospital
stays.
✔✔Suppose the market for nursing services in a local community is so dominated by a
single community hospital that, for all practical purposes, it is considered a monopsony.
Using the diagram below, answer the question.
If the market were perfectly competitive instead of dominated by a monopsonist, what
would the equilibrium wage and level of employment be?
a. W2 and E0
b. W0 and E1
c. W0 and E0
d. W0 and E2
e. W1 and E1 - ✔✔e. W1 and E1
✔✔Which of the following statements is true about cost shifting in hospitals?
a. Regardless of payer mix, hospitals are taking full advantage of their bargaining power
with payers who are able to cost shift.
b. Capacity-constrained medical providers are not able to cost shift.
c. The positive correlation coefficient between cost-to-payment ratios for various payers
indicates that cost shifting is taking place.
d. The ability to cost shift depends on a hospital's payer mix.
e. Classic Ramsey pricing can be interpreted in different ways, leading researchers into
arguing that if it looks like cost shifting, it probably is cost shifting. - ✔✔d. The ability to
cost shift depends on a hospital's payer mix.
