A Clinic Uses Doctors and Nurses Optimally and Is Servicing

question 94

Multiple Choice

A clinic uses doctors and nurses optimally and is servicing the maximum number of patients given a limited annual payroll.The last doctor hired treated 1,600 extra patients in a year,while the last nurse hired treated 1,000 extra patients in a year.If doctors make $64,000 a year and nurses make $40,000 a year,then

• A)the clinic could serve more patients by hiring more doctors and fewer nurses.
• B)the clinic could serve more patients by hiring fewer doctors and more nurses.
• C)the clinic is making the correct decision.
• D)the clinic is not making the correct decision because the additional patients per dollar spent on doctors is greater than the additional patients per dollar spent on nurses.
• E)a and d

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Definitions:

Equity Method

An accounting method for recording investments in which the investment is initially recorded at cost and subsequently adjusted for the investor's share of the investee's net profits or losses.

Subsidiary Company

An entity that is owned, either fully or partially, by another entity known as the parent company, contributing to the control and business operations as part of a larger corporate structure.

Joint Venture Entity

A business entity formed by two or more companies to undertake a specific business venture together, sharing risks, costs, and rewards.

Business Undertaking

A venture or project that is undertaken by a business or organization, often involving considerable risk.