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Question
Suppose the following two events occur in the market for elementary school teachers:a. Overcrowded schools and education budget cuts have discouraged young college students from pursuing careers in teaching.
b. With an increasing birth rate, the number of children entering the elementary school system is expected to increase significantly over the next ten years.
What is likely to happen to the equilibrium wage and quantity of teachers as a result of these two events?
A) The equilibrium quantity and the equilibrium wage of elementary school teachers fall.
B) The equilibrium wage rises and the effect on the equilibrium quantity of elementary school teachers is indeterminate.
C) The equilibrium quantity falls and the effect on the equilibrium wage of elementary school teachers is indeterminate.
D) The equilibrium quantity falls and the equilibrium wage of elementary school teachers rises.
Answer
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Related questions
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If a firm in a perfectly competitive industry introduces a lower-cost way of producing an existing product, the firm will be able to earn economic profits in the long run.
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Which of the following describes a difference between allocative efficiency and productive efficiency in a perfectly competitive market?
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B) Allocative efficiency is achieved only in the long run. Productive efficiency is achieved in the short run and the long run.
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If a perfectly competitive firm raises the price it charges to consumers, which of the following is the most likely outcome?
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Suppose two countries use different combinations of inputs, such as labor and capital, to produce the same product. This implies all of the following except that
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B) its revenue increases.
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B) the relative input prices.
C) the slope of the isocost line.
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The typical shape of an isoquant is
A) convex towards the origin.
B) concave towards the origin.
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D) linear and upward sloping.
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An expansion path shows
A) the level of sales necessary for a firm if it wants to expand.
B) the level of long-run average cost at different scales of operation.
C) the least-cost combination of inputs for each level of output.
D) the returns to scale at each level of output.
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Maximizing the level of output for a given total cost of production
A) is equivalent to producing the profit maximizing output level.
B) is equivalent to minimizing cost for a given level of output.
C) necessitates using only relatively low-priced inputs.
D) will maximize total revenue.
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Golda Rush quit her job as a manager for Home Depot to start her own hair dressing salon, Goldilocks. She gave up a salary of $40,000 per year, invested her savings of $30,000 (which was earning 5 percent interest) and borrowed $10,000 from a close friend, agreeing to pay 5 percent interest per year. In her first year, Golda spent $18,000 to rent a salon, hired a part-time assistant for $12,000 and incurred another $15,000 on equipment and hairdressing material. Based on this information, what is the amount of her implicit costs?
A) $80,000
B) $70,000
C) $42,000
D) $41,500
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Which of the following would be categorized as an opportunity cost?
a. not being able to spend your $10,000 savings if you sink the money in your business
b. the cost of purchasing supplies for your house-cleaning business
c. the cost of purchasing auto insurance for your dry-cleaning delivery business
A) a only
B) a and c only
C) b and c only
D) all of the above