Consider the Labor Market for Nurses, Which Initially Is in Equilibrium

question 150

Multiple Choice

Consider the labor market for nurses, which initially is in equilibrium. Suppose the output price for nursing services increases. Holding all else equal, what effect will this have on the labor market for nurses?

• A) The equilibrium wage will increase, and the equilibrium quantity of nurses will increase.
• B) The equilibrium wage will increase, and the equilibrium quantity of nurses will decrease.
• C) The equilibrium wage will decrease, and the equilibrium quantity of nurses will increase.
• D) The equilibrium wage will decrease, and the equilibrium quantity of nurses will decrease.

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Definitions:

R&D

Research and Development: Activities in connection with corporate or governmental innovation.

Marginal Cost

The spending necessary to fabricate one more unit of a good or service.

Herfindahl-Hirschman Index

An index measuring the level of concentration in a market, calculated by summing the squares of the market shares of all competitors.

Antitrust Division

A government department responsible for enforcing laws that promote competition and prevent monopolies and anti-competitive practices.