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, what effect does this have on the labor market for health care employees? The equilibrium wage decreases and the equilibrium quantity of labor increases. The equilibrium wage increases and the equilibrium quantity of labor increases. The equilibrium wage increases and the equilibrium quantity of labor decreases. The equilibrium wage decreases and the equilibrium quantity of labor decreases.

Answer 1

Answer:

The equilibrium wage increases and the equilibrium quantity of labor increases.

Explanation:

Supply is defined as the amount of product or service that a supplier bis willing to give at a particular price. In the health industry labour is the service being provided and wage is the price paid to obtain labour.

When output price of healthcare services increases due to aging population in the United States, there is an increase in the wages of healthcare workers.

As they recieve higher wages this motivates them to provide higher levels of labour.