If the price of a good or service rises, households have to choose whether to buy less of that good or service or spend less on other goods and services.When doctors and/or nurses demand pay increases, provincial governments
A)cut back on their total spending on health care.
B)increase spending on other programs.
C)automatically increase sales taxes to pay for the increased spending on health care professionals.
D)must either cut back on other programs, hire fewer doctors and/or nurses, or increase taxation.

Question

Quizplus · Accepted Answer

When doctors and/or nurses demand pay increases, provincial governments must either cut back on other programs, hire fewer doctors and/or nurses, or increase taxation in order to pay for the increased wages. Option A is not a viable option, as cutting back on total spending on healthcare is not a solution. Option B may not be a feasible solution as increasing spending on other programs may not be possible within the limited budget. Lastly, option C may not be the best solution as automatically increasing sales taxes for paying the increased salaries might not be acceptable to the public.

If the Price of a Good or Service Rises, Households