Suppose That a Community Health Center Finds That, Regardless of the Number

question 113

Multiple Choice

Suppose that a community health center finds that, regardless of the number of physicians or nurse practitioners employed, it can always replace one family practice physician by using two additional nurse practitioners without affecting the quantity or quality of patient office visits. This finding implies that:

• A) physicians and nurse practitioners are perfect substitutes in production.
• B) physicians and nurse practitioners are perfect complements in production.
• C) diminishing returns will occur as the health center hires more nurse practitioners.
• D) the marginal product of physicians will increase by two with every nurse practitioner hired.

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Definitions:

Owner's Drawings

Owner's disbursements from a business in either a sole proprietorship or partnership for personal expenditures.

Salaries and Wages Expense

The total amount spent by a business on its employees' salaries and wages during a specific period.

Equipment

Tangible assets used in operations, such as machinery and office hardware, which are subject to depreciation over their useful lives.

Debit

A financial record that boosts asset or expense ledgers or reduces liability, equity, or income ledgers.