Figure 2-5
A, The hypothetical relationship
between inputs to a productive process and the benefits derived describes a production
function. As investment continues, the net benefit, segment ΔBn
,
progressively decreases and then becomes negative, illustrating the law of diminishing
returns. B, Rationalizing rather than rationing health-care
technology achieves maximal benefit at "the top of the curve," a level of investment
associated with the optimal investment. (A
is reproduced from Orkin[45]
; B
is modified from Orkin[45]
and Reinhardt.[46]
)