Question

Consider the labor market for heath care workers. Because of the aging population in the United States, the output price for health care services has increased. Holding all else equal, in the labor market for health care employees the equilibrium wage_____________.

a. increases, and the equilibrium quantity of labor decreases.
b. decreases, and the equilibrium quantity of labor decreases.
c. decreases, and the equilibrium quantity of labor increases.
d. increases, and the equilibrium quantity of labor increases.

Answer 1

The answer is option A) Holding all else equal, in the labor market for health care employees the equilibrium wage increases, and the equilibrium quantity of labor decreases.

Step-by-step explanation:

The increase in the number of citizens that need medical care in the united states as a result of the aging population is directly proportional to the supply of health workers.

Now that there is an increased demand for health care employees which implies more responsibility, their wage will increase.

The aging population also consists retired health workers thereby causing a corresponding decline in the equilibrium quantity of health care employees in the united states.