Question

Fixed short run inputs do not explain diminishing productivity. T OR F

Managed care is the culprit that greatly contributes to the shortage of primary care physicians in the U.S. T OR F

Technological innovations do not contribute to the increased expenditure in health care in the U.S. T OR F

Laparoscopic cholecystectomy surgery decreases the number of days needed for patients to return to work. It also decreases the length of hospital stays.   Laparoscopic cholecystectomy surgery, a cost-increasing innovation, increases the cost of treatment. T OR F

Vaccines and generic drugs are examples of cost-increasing technologies. T OR F

The short run cost curve shifts downward when costs increase. T OR F

Answer 1

Question No:1

Diminishing productivity is a concept used in production. According to this concept, when more inputs are added in production, output level will also rise. But, after a particular level of input, the level of outcome will not increase beyond a limit. After certain more level of input, the output will start decreasing. This is the theory of diminishing marginal productivity.

Fixed input is a production element that cannot be varied in the production process in short-run because that will ultimately vary the output quantity. In short-run production, fixed inputs include equipment, land and building etc. The cannot be changed in the shot-run.

Hence, the statement is true.

Question No:2

Managed care in US means assembling health care providers for gaining both regulation of costs relating to health care as well as ensuring quality of health care. Thus, as the managed health care provides physicians, it cannot be said as a reason for the shortage of health care providers.

Hence, the statement is false.

Question No:3

Technological innovations in US health care means anything new or any improvements implementing in the health field. For such an innovation and the implementation of such a technology, huge amount of money should be expended. Hence, it contributes to the increased expenditure of health care in US.

Hence, the statement is false.

Question No:4

In a laparoscopic cholecystectomy surgery, gall bladder will be removed. This is not a big surgery including large cuts. This surgery include only small cuts. This surgery uses a laparoscope with camera into see insert into the body. Hence, only one small cut will be there in body after the surgery.

Laparoscopic cholecystectomy surgery is a less expensive treatment when compared to an open cholecystectomy surgery.

Hence, the statement is false.

Question No:5

Usually, vaccines and generic drugs are similar to the original medications. But, they will be available more cheaper than the original ones. When patent of an original medicine expires, another copies of this medicine will be produced and enter into the market for sale. Thus, the rate will be less. So, these are not examples of cost-increasing technologies.

Hence, the statement is false.

Question No:6

A short run cost curve depicts the minimal amount of cost effects causing to the level of output is varying according to the size of a particular plant within a specific environment. Thus, this curve shows the least-cost input combination for a particular output under fixed conditions. When the cost of the production factors rises, the overall cost will also rise. This will make the short run cost curve shift upward.

Hence, the statement is false.