1. Hospitals announce that there are not enough nurses available to keep them fully staffed. Economically speaking, what does this announcement mean?

• The market wage for nurses will eventually rise to the market clearing wage.

• The market will adjust very rapidly to correct this imbalance because anyone can be a nurse without any training.

• The market wage for trained nurses is currently above the equilibrium wage.

• There is currently a surplus of nurses in this market.

2. 

By $2017,$ Pepsi and Coke were attempting to increase their profits in the bottled water market by introducing premium water brands. Pepsi and Coke introduced LIFEWTR and Smartwater, respectively, while competitors like Nestle and Danone produced their own versions of premium water. The premium water brands marketed to compete with LIFEWTR and Smartwater would be considered

inferior goods compared to LIFEWTR and Smartwater.

normal goods compared to LIFEWTR and Smartwater.

substitutes for LIFEWTR and Smartwater.

complements to LIFEWTR and Smartwater.

Answer rating: 100% (QA)

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