MHA 710 ECONOMICS COMPREHENSIVE EXAMS
QUESTIONS AND ANSWERS SURE A+
✔✔Physicians who own their own diagnostic testing facilities tend to order more tests,
charge higher fees for them, and have higher total bills to patients. This practice of self-
referral is an example of:
a. res ipsa loquitur.
b. cognitive dissonance.
c. adverse selection.
d. moral hazard.
e. physician-induced demand. - ✔✔physician-induced demand.
✔✔Using the physician-control model to explain hospital behavior leads to which of the
following conclusions?
a. The use of operating rooms will be maximized with little excess capacity.
b. Physicians will strive to use the nursing staff efficiently.
c. Other medical inputs tend to be overused to maximize physicians' productivity.
d. All investment decisions will be based on optimal resource use. - ✔✔Other medical
inputs tend to be overused to maximize physicians' productivity.
✔✔The merger of two community hospitals located in the same geographic market is
called:
a. horizontal integration.
, b. a real shame, as one of the hospitals will likely close.
c. a conglomerate merger.
d. vertical integration.
e. a leveraged buyout. - ✔✔horizontal integration.
✔✔Legislation considered by Congress to restrict legal immigration would:
a. surprise many policymakers because Congress finds it difficult to agree on much of
anything regarding immigration.
b. have little effect on medical markets, as so few physicians practicing medicine in the
United States are foreigners.
c. raise the costs of operating in many of the nation's rural and inner-city hospitals.
d. allow more Americans trained abroad to compete for openings in United States'
residency programs.
e. improve employment prospects for native-born Americans. - ✔✔raise the costs of
operating in many of the nation's rural and inner-city hospitals.
✔✔Changes caused by the shift from charge-based rates to negotiated rates has had
which of the following results?
a. The change has increased the importance of Ramsey pricing principles in setting
rates.
b. Charging master rates serve as a powerful guide for optimal resource allocation in
the industry.
c. Most hospitals experience a gap between the amount they receive from their payers
and the amount billed, with receipts as low as 20 percent of amount billed.
d. A growing percentage of patients with insurance are paying billed rates. - ✔✔Most
hospitals experience a gap between the amount they receive from their payers and the
amount billed, with receipts as low as 20 percent of amount billed.
✔✔Economies of scale exist when:
a. short-run average costs decline.
b. long-run average costs decline as output increases.
c. long-run average costs increase as output increases.
d. long-run average costs are constant.
e. short-run average costs increase. - ✔✔long-run average costs decline as output
increases.
✔✔This study was the catalyst for the early twentieth century reform of medical
education in the United States. What was it?
a. Kaiser Foundation Study
b. Coolidge Commission
c. Hill-Burton Committee
d. Mangrum Report
e. Flexner Report - ✔✔Flexner Report
✔✔What is the most significant cost of attending medical school?
QUESTIONS AND ANSWERS SURE A+
✔✔Physicians who own their own diagnostic testing facilities tend to order more tests,
charge higher fees for them, and have higher total bills to patients. This practice of self-
referral is an example of:
a. res ipsa loquitur.
b. cognitive dissonance.
c. adverse selection.
d. moral hazard.
e. physician-induced demand. - ✔✔physician-induced demand.
✔✔Using the physician-control model to explain hospital behavior leads to which of the
following conclusions?
a. The use of operating rooms will be maximized with little excess capacity.
b. Physicians will strive to use the nursing staff efficiently.
c. Other medical inputs tend to be overused to maximize physicians' productivity.
d. All investment decisions will be based on optimal resource use. - ✔✔Other medical
inputs tend to be overused to maximize physicians' productivity.
✔✔The merger of two community hospitals located in the same geographic market is
called:
a. horizontal integration.
, b. a real shame, as one of the hospitals will likely close.
c. a conglomerate merger.
d. vertical integration.
e. a leveraged buyout. - ✔✔horizontal integration.
✔✔Legislation considered by Congress to restrict legal immigration would:
a. surprise many policymakers because Congress finds it difficult to agree on much of
anything regarding immigration.
b. have little effect on medical markets, as so few physicians practicing medicine in the
United States are foreigners.
c. raise the costs of operating in many of the nation's rural and inner-city hospitals.
d. allow more Americans trained abroad to compete for openings in United States'
residency programs.
e. improve employment prospects for native-born Americans. - ✔✔raise the costs of
operating in many of the nation's rural and inner-city hospitals.
✔✔Changes caused by the shift from charge-based rates to negotiated rates has had
which of the following results?
a. The change has increased the importance of Ramsey pricing principles in setting
rates.
b. Charging master rates serve as a powerful guide for optimal resource allocation in
the industry.
c. Most hospitals experience a gap between the amount they receive from their payers
and the amount billed, with receipts as low as 20 percent of amount billed.
d. A growing percentage of patients with insurance are paying billed rates. - ✔✔Most
hospitals experience a gap between the amount they receive from their payers and the
amount billed, with receipts as low as 20 percent of amount billed.
✔✔Economies of scale exist when:
a. short-run average costs decline.
b. long-run average costs decline as output increases.
c. long-run average costs increase as output increases.
d. long-run average costs are constant.
e. short-run average costs increase. - ✔✔long-run average costs decline as output
increases.
✔✔This study was the catalyst for the early twentieth century reform of medical
education in the United States. What was it?
a. Kaiser Foundation Study
b. Coolidge Commission
c. Hill-Burton Committee
d. Mangrum Report
e. Flexner Report - ✔✔Flexner Report
✔✔What is the most significant cost of attending medical school?
