When a transfer price is set higher
a. the profits of the division producing the intermediate product will rise
b. the profits of the division producing the intermediate product will fall
c. the costs of the division producing the intermediate product will rise
d. the costs of the division producing the intermediate product will fall
QUESTION 2The most important aspect of the change from fee-for-service to capitation is that
a. physicians get their money quicker.
b. patients get faster service since physicians don't have to worry about getting paid.
c. physicians make less money.
d. the most valuable patient is no longer the sickest, but the most healthy.
QUESTION 3The X-intercept of the budget constraint represents
a. how much of good Y can be purchased if no good X is purchased and all income is spent.
b. how much of good X can be purchased if no good Y is purchased and all income is spent.
c. total income divided by the price of X.
d. b and c.
QUESTION 4Transfer prices
a. are an accounting devise to allocate the costs and revenues of intermediate products across divisions
b. increase the 'profits' of the profit center producing the intermediate product when they rise
c. decrease the 'profits' of the profit center using the intermediate product when they rise
d. all of the above
QUESTION 5To control moral hazard and the increased spending that accompanies it, managed care providers include _______ in contracts with providers.
a. clinical rules
b. capitation
c. risk sharing
d. all of the above
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