Suppose a hospital only needs one input1 nurses. to treat their patients. A. public insurer reimburses
each treatment at $10 and suppose that the hospital needs to hire L nurses to provide T = 5L —
$ $15.2 treatments. Hospitals pay their nurses a wage W and suppose that 5+ g nurses arewilling
to work at the hospital for a wage W. 1. Express hospital revenues, costs. and profits in terms of the number of employed nurses, L,
and the prevailing wage W. {Ii points} 2. Specify the hospital’s demand curve for nurses as well as the muses" labor supply curve. Also
display them in a diagram1 with employment on the horizontal axis and the wage on the
vertiml aids. {En points} 3. In perfect competition. what would be the equilibrium wage and employment level? [fi points} 4. Now imagine that the hospital acts as a monnpsnnist in the labor market [monopoly in
employment}. Ebtprem hospital revenues. seats and profits in terms of employment only.
What is the profit maximizing employment level and what would be the eorresponding wage?
Add the marginal ecst of labor equation to the diagram and display the new equilibrium wage
and employment. Quantity the deadweight less. {l5 points} 5-. Now imagine that the nurse: formal. union andnegp‘tiabeaminimum wage ocfflfl. What would he the effect on employment and what is the new deadweight loss? How do your numbers
change if nurses bargain a minimum wage of 40'? {6 points}

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Status NEW Posted 05 Jun 2017 06:06 AM My Price 8.00

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