Chapter 8 Final Questions
Implicit costs are:
"payments" for self-employed resources
If you know that total fixed cost is $200, total variable cost is $600, and total product is 4 units, then average total cost must be:
$200
If the demand for hospital visits in a city are 10,000 and a typical physician office can accommodate 50 patients per day, the number of physician offices is
200
Diminishing marginal returns occurs as a firm adds more variable inputs to at least one fixed input because:
As more variable inputs are hired, the amount of the fixed input per variable input decreases
When a dental office reports that the productivity of 15 workers working at the office is 12 patients per month per worker, it is referring to the:
Average product of labor
A perfectly elastic demand curve implies that the firm:
can sell as much output as it chooses at the existing price
A competitive firm in the short run can determine the profit-maximizing (or loss-minimizing) output by equating:
marginal revenue and marginal cost.
The demand schedule or curve confronted by the individual, purely competitive firm is:
perfectly elastic.
Hospitals compete mainly in a _________ market.
Geographic market
The cost of a national health insurance program would be____ and the availability of services _______ when supply is more ________.
Greater; diminished; inelastic
Marginal product of labor refers to the:
Increase in output resulting from employing one more unit of labor
A hospital is experiencing economies of scale, if
Its average cost curve is negatively sloped as output increases.
Monopolistic competition is described as
Many differentiated firms and intense price competition
The marginal cost curve is upward sloping because
Marginal productivity is falling with production
An industry comprised of a very large number of sellers producing a standardized product is known as:
Monopolistic competition
Which market structure is characterized by a large number of differentiated firms? (Hint: see page 177 of the textbook)
Monopolistic competition
Which would be an implicit cost for a firm? The cost
Of wages foregone by the owner of the firm
In the short run, a purely competitive firm will always make an economic profit if:
P > ATC
Which of the following statements is correct?
The demand curve for a purely competitive firm is perfectly elastic, but the demand curve for a purely competitive industry is downsloping
When the patient lacks information, the physician demand curve _____.
Becomes less elastic
Variable costs are:
Costs that change with the level of production
Economies of scale
Depend on the spreading of minimal fixed costs over a number of procedures.