Empirical Studies Suggest That, Other Things Equal, the Smaller the Number

question 295

Multiple Choice

Empirical studies suggest that, other things equal, the smaller the number of hospitals in a city, the lower are nurses' wages. This is evidence that

• A) the labor markets of nurses are purely competitive.
• B) hospitals may possess some degree of monopsony power.
• C) the minimum wage does not apply to nurses.
• D) labor unions have been ineffective in increasing the wages of nurses.

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Definitions:

Personalized Sweaters

Custom-made sweaters tailored to individual preferences regarding design, color, and often with personal messages or images.

Fixed Cost

Expenses that do not change in the short term, regardless of the level of output or sales, such as rent, salaries, and loan payments.

Monopolistically Competitive

A market structure characterized by many firms selling products that are similar but not identical, allowing for some degree of market power and price-setting ability.

Short Run

A period during which at least one factor of production is considered fixed, limiting the capacity to adjust production levels.