Suppose That a Town Has Two Major Hospitals

question 59

Multiple Choice

Suppose that a town has two major hospitals. One of these hospitals is unionized and the union has just negotiated a 10% wage increase each year for the next three years. Which of the following is most likely to occur?

• A) The price of labor in the unionized hospital will increase, but there will be no changes in the price of labor in the nonunionized hospital.
• B) The price of labor will change in both the union and nonunion hospitals, but no other input markets will be affected.
• C) The price of labor will change in both the unionized and nonunionized hospitals. Employment of labor and other inputs is also likely to change in both hospitals.
• D) The only effect will be that the price charged by the unionized hospital will increase to cover the additional costs of labor.

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Definitions:

NADH

Nicotinamide adenine dinucleotide (NADH) is a coenzyme found in all living cells, involved in redox reactions and energy production through cellular respiration.

Glycolysis

The metabolic pathway that breaks down glucose into pyruvate, releasing energy and pyruvic acid, occurring in the cytoplasm of cells.

Niacin

Also known as Vitamin B3, it is essential for converting food into energy, maintaining skin health, and supporting the nervous and digestive systems.

Pellagra

A vitamin deficiency disease most commonly caused by a lack of niacin (vitamin B3) in the diet, leading to dermatitis, diarrhea, dementia, and even death if untreated.