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    How wages are determined

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    Two principles of economics that help explain how wages are determined in a market economy are:
    #1-People Face Tradeoffs and
    #2-Governments Can Sometimes Improve Market Outcomes
    Consider these principles when completing the assignment. Think of how they apply to the labor market for nurses.

    Research the labor market for any state to determine how nursing wages are calculated.
    Use the internet for this research.
    Write a 700-1050 word paper in APA format, in which you:
    Cite the state and the URL of the Web site used in your research
    Discuss which factors could influence the supply and demand of a nurse's position.
    Discuss how a nurse's pay is determined and how the salary is structured.
    Discuss what your chosen state can do to increase the supply of nurses.

    Include a title and reference page in APA format.
    Be sure to answer all questions.

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    Solution Preview

    In most markets, wages are determined by supply and demand. If the need for a particular position is great, wages will rise in order to attract more workers to this field. Interestingly, for nurses this has not been the case. An analysis of this situation can be found in a report entitled "Solving the Nursing Shortage through Higher Wages" which can be found here:

    According to this research,
    ? Over the late 1990s and into 2000, nurses' pay did not increase at all, although some hospitals had already
    begun worrying about a nurse shortage in 1997.
    ? When wages finally began to rise, nurses responded promptly?hospitals added 186,500 nurses between 2001
    and 2003.
    ? Instead of competing for nurses by increasing pay, hospitals often turn to a ...

    Solution Summary

    Use of economic principles to determine how wages are determined in a market economy