Chapter 7: Production Concept in Health Care Flashcards
Goods and services cannot be produced without utilizing the factors of production such as
Land, labor, capital, and entrepreneurship
Critical decisions/questions made when it comes to health care sector
What services/goods should be given priority - vaccination program or improved housing conidtions?
How much of which services/goods should be produced first?
Transformation of inputs into outputs
Production
The result that has been created by the inputs
Output
The factors of production are called the
inputs of production
What are the two types of outputs
Goods and Services
Is the process by which inputs are turned into outputs
The technology of a firm
Factors of production are classified into
Fixed Factor and Variable Factor
Remains constant regardless of the volume of production
Fixed Factor
Changes in accordance with the volume of production
Variable Factor
Two aspects of the production decision
The ability to produce
The willingness to produce
Prescribed by resources availability (related to resource costs) and state of technology
The ability to produce
Prescribed by the profit incentives (production benefits relative to production cost)
The willingness to produce
Technical name given to a relationship between quantities of various inputs used and the maximum output that can be produced with those inputs used per unit of time.
The production Function
Shows what is technically feasible when the firm operates efficiently
the production function
The quantities of one or more production factors cannot be changed or that the use of at least one factor of production cannot be changed.
Short-Run
Also known as fixed inputs
Short-Run