Quiz 1) MHA 710 Quiz 1: Questions & Answers: (Solved)

Suppose the market for hospital outpatient treatment is in equilibrium when a price ceiling is set below the equilibrium price. What do you expect to happen? (Ans - A shortage will develop. The optimal level of output may be defined as that level of output where: (Ans - the marginal benefit of the last unit purchased equals its marginal cost. Which of the following statements is based on positive analysis? (Ans – High health care prices are one of the primary reasons that the United States spends more on medical care than other countries. If two women receive the same hip replacement procedure at a hospital, but are charged differently, it is an example of: (Ans - price discrimination. Supply curves are positively sloped because of: (Ans - the increasing opportunity cost of resources. If a hospital dumps its biohazardous waste into the ocean and it pollutes the neighboring state, this is an example of: (Ans - a negative externality. In the nation of Pavlova, a significant proportion of the population suffers from breathing difficulties later in life. Pavlova Medical produces the only prescription drug that is effective in treating the condition. Which of the following terms best describes the situation in the market? (Ans - Monopoly Assuming that inputs are perfect complements, how will the production isoquants be graphically depicted? (Ans - L-shaped curves A physician's office expenses increase by 10 percent, so the doctor decides to raise the price of office visits. Assuming the demand curve for office visits does not shift, what will happen to the total number of office visits and practice revenues? (Ans - Office visits will fall and total revenue will rise if demand is inelastic.