A clinic uses doctors and nurses to serve the maximum number of patients given a limited annual payroll. The clinic currently has 10 doctors and 30 nurses. The last doctor hired can serve 300 additional patients, while the last nurse hired can serve 200 additional patients. If doctors make $60,000 a year and nurses make $20,000 a year, the clinic
A. is making the correct hiring decision because doctors are more productive than nurses.
B. could serve more patients with the same payroll by hiring more doctors and fewer nurses.
C. could serve more patients with the same payroll by hiring more nurses and fewer doctors.
D. is making the correct hiring decision because doctors are paid more than nurses.
Answer: C
You might also like to view...
In an open economy, an increase in capital inflows ________ the equilibrium domestic real interest rate and ________ the quantity of domestic investment.
A. decreases; increases B. increases; decreases C. increases; increases D. decreases; decreases
Which of the following is true?
A) Accounting profits = Revenues - Implicit costs - Explicit costs B) Economic profits = Revenues - Explicit costs C) Accounting profits = Revenues - Implicit costs D) Economic profits = Accounting profits - Implicit costs
Government-imposed quantity restrictions
A. generate a higher price for the good than would prevail under freely competitive markets. B. can cause prices to either be higher or lower, but always cause excess quantities supplied to develop. C. does not affect the price of the good because quantity restrictions always ban sale of the good completely. D. generate a lower price for the good than would prevail under freely competitive markets.
A natural monopoly that is NOT regulated will choose to produce at the
A. point at which marginal revenue equals marginal cost. B. point at which marginal cost is above average total cost. C. point at which the demand curve intersects the long-run average cost curve. D. minimum point of the long-run average cost curve.