Which of the following options explain why might Miami and La Crosse have different health production functions? Different input costs Different hospital amenities Different medical malpractice environments All of the above

A production function shows the relationship between the flow of inputs and outputs with the use of a given technology. Correct Option: All of the above Reason: A production function includes various factors while determining the relationship between the inputs and the outputs. Therefore, it gets influenced by the change in any of these factors. Therefore, due to the following reasons Miami and La Crosse will have different health production: The difference in the cost of inputs will make the inputs expensive to the one who has to pay the higher price, therefore, she could employ less input which may result in lower output. This will lead to a difference in the relationship between the input and the output. Hospital amenities help in the better usage of the available inputs therefore, the difference in the available resources of hospital amenities is also responsible for the difference in the production function. Malpractice creates negative externalities for production and therefore, higher malpractice will lead to less efficient output resulting in a difference in the production function.