Medical Care Production and costs
- Explain the difference between technical efficiency and economic efficiency.
- Discuss the relation between the marginal and average productivity curves and the marginal and average variable cost curves.
- What does the elasticity of substitution illustrate? How is it expressed mathematically?
- What two factors affect its magnitude?
- Explain the difference between the explicit and implicit costs of production. Cite an example of each.
- What does economies of scope mean? Provide an example.
- Explain the reasoning behind the U shape of the long-run average total cost curve. Why might this cost curve shift upward?
- Describe the two limitations associated with the cost theory provided in this chapter when it is applied to explain the behavior of medical firms.