The interviewer is trying to find out, "How desperate are you?"

BEST ANSWER:  Prepare  for this question by thinking of  how you can position yourself as a desired commodity.  If you are still working, describe the possibilities at your present firm and why, though you're greatly appreciated there, you're looking for something more (challenge, money, responsibility, etc.).  Also mention that you're seriously exploring opportunities with  one or two other  firms.

If you're not working, you can talk about other employment possibilities you're actually exploring.  But do this with a light touch, speaking only in general terms.  You don't want to seem manipulative or coy.

Of course you must take into account your personal situation with your finances and responsibilities.  Only you know whether you need to accept the job or not. With this said, there are many ways to view your current situation. First, if you are being severely underpaid for the position given the pay range for the position and taking into account your experience (or lack thereof) - this is not a recommended way to begin a career or new employment. If you truly believe that you are not being paid what the position should provide for someone with your background and skills, you will be unhappy from the moment you start working the new position. From experience, I have taken such jobs for low pay in order to "pay the bills" but I immediately started looking for better opportunities elsewhere. When you begin a career at a company or in your case a hospital, you must be extremely careful when agreeing to your starting wage. The starting wage is where you must work your way up the pay scale from. If you start out too low - you will find that afters years of hard work and pay raises that you will finally reach the pay level that you are worth today! Companies love this because they can give you many raises and still get a bargain for your services. In order to negotiate the best starting salary for a position, you need a starting point or base range of salaries. This means doing research online, perhaps other hospitals that are nor affiliated with the hospital you are interviewing with, check the job boards, ask career professionals, and if it's a state funded hospital you may find public records of the hospital's financials. It is best to try and figure out the range of salaries offered for the position - from the lowest to the highest. When you do this, you know what are your "possible" or "realistic" salaries for the position. Now that you have a range of salaries, you consider your skills, work history, and experience. Given everything you know about the position, your personal finances, career goals, given job opportunities in location, etc. You must figure out what is the minimum pay you would accept - where you felt and believed that you are willing to accept and be "OK" to earn. You don't have to absolutely be thrilled about it, but you want to be sure you won't wake up every morning upset that you are going to work for such a low wage - unless of course you are doing so to "Pay the Bills". Basically, from the way you phrase your question it sounds like you really want the job, just not for the wage they are offering. Now that you know from your research the range of salaries they offer for the position and the absolute lowest wage you are willing to take for the job - you can figure out the wage differential (Your desired wage minus the lowest acceptable wage = the price difference between a job and a great job). Now take the price difference and think about what it can purchase or provide for you? OK, now here is the part where you take a moment and seriously considered if you want to risk the job position at all by asking for a better starting wage for when you get hired or want to just accept what they offer you. Then make your choice whether you want the job with or without the increase pay. If you decide to go for the increase pay, you can take either the direct or indirect approach when asking for the increase. Direct Approach: Be confident in a genuine way, believe in yourself and express clearly why your skills, experience, background, work history, etc. warrant a higher starting salary. If you really have what it takes, there is nothing wrong in being open about your desire for a hirer starting salary. Whatever do you, don't say that you deserve it because someone else has a higher salary. When you concentrate on what someone else gets paid and you don't focus on your abilities, skills, and good qualities that you have developed within yourself - this will only impact you negatively in the long-run. Indirect Approach: Ask leading questions to get more information about the position and the salary range. For example, ask "What is the typical salary range for this position?" That's a fair question. Then you may ask, "What do they look for in an employee, or what types of skills or qualifications are necessary to obtain raises?" How often are there opportunities for reviews for pay increases?" If you think about your situation you can gather enough questions to get at the important information you need to make your decision. Lastly, I have found that in many cases that it is easier to work your way up, or find un-expected opportunities within a company or hospital than from the outside. If you are the type of person who constantly challenges yourself to learn new skills and take on additional duties or responsibilities to gain the experience and skills necessary to do job well (and with a good positive attitude) you will always be confident that you have got what it takes to get what you desire and deserve. Good Luck.