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The Medicare Payment Advisory Commission recently voted to suggested to Congress to institute a set of pay for performance incentives for providers serving Medicare patients. This would include paying bonuses to providers as incentives to meet or exceed certain quality indicators. As an example, consider the following: Diabetics need to have a certain blood test (hemoglobin A1c) performed either annually or quarterly depending on how well they manage their illness. Let's say that studies show that physicians follow these guidelines for only 60% of their diabetic patients, and the government will make incentive payments to those physicians if 70 percent or more of their diabetic patients are tested appropriately. Incentive payments are not uncommon among other non-Medicare payers, as well as in non-medical markets. When it comes to providing medical care, do you think such an incentive scheme is appropriate or not? Provide your reasons.
Describe the concept of the law of "diminishing returns" and why does it take place only in short run? Differentiate between "the long run return to scale" and "economies of scale."
Assume you are an aid to a government official planning on some recently proposed excise tax on welfare of her constituents.
Operating Cash Flows. Laurel's Lawn Care, Ltd., has a new mower line that can generate revenues of $120,000 per year. Direct production costs are $40,000 and the fixed costs of maintaining the lawn mower factory are $15,000 a year.
What are some of the ethical dilemmas encountered by traders in their pursuit of profits for both their company and themselves?
Consider a market characterized by the following inverse demand and supply functions: PX = 10 - 2QX and PX = 2 + 2QX?
What is the Marginal Cost? What is the Average Cost? What is the optimal production level where production costs are the lowest per unit?
Determine the trade volume necessary for PBI to reach a target return of $7,500 per month for a typical office. Determine and interpret the elasticity of cost with respect to output at the trade volume found in part A.
The companies in the detergent market closely fit the mold of the monopolistic competitive firm. Research the company in this market and describe how it fits some of the characteristics of the monopolistic competitive firm.
What are the pros and cons of conducting an experimental versus an observational study? What are examples of these studies? Can both types of studies be used for all projects?
Marketing mix is controllable set of activities that the firm employs to respond to the wants of its target markets. Make a report on the marketing mix and keep the following questions in mind:
A typical university football event need alumni to join one of many booster club before the person can buy season tickets.
Compute output, marginal cost, average cost, price, and profit at the average cost-minimizing activity level. Compute these values at the profit-maximizing activity level.
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