The Making Ethical Decisions Box "Good Finance or Bad Medicine

question 295

Multiple Choice

The Making Ethical Decisions box "Good Finance or Bad Medicine" has an important message for managers who make financial decisions. Which of the following statements summarizes this message?

• A) Managers must balance good economic decisions with socially forward thinking.
• B) Financial decisions must be based on what insurance companies are willing to pay.
• C) Checking academic credentials of recently graduated doctors is imperative due to the cost of lawssuits that patients may file if they learn that they were served by a surgeon without a license.
• D) The support of a good law firm is worth every penny a hospital might pay. The finance manager should always budget for a legal team.

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Definitions:

Average Total Costs

The total of all production costs divided by the number of units produced, summarizing the per-unit cost of production.

MC

The cost added by producing one more unit of a product, crucial in determining the optimal production level for a company.

MR

Marginal Revenue, the additional income earned from selling one more unit of a good or service.

AVC

Average variable cost; the total variable costs divided by the quantity of output produced, illustrating cost per unit.