Post by: bryantpr01 on Nov 23, 2022
Assume that P1=$83.00, P2=$62.50, P3=$42.00, Q1=325, Q2=420, Q3=745, Q4=225, Q5=285, and Q6=435. Suppose that comparable-worth legislation is passed, and the government requires that economic professors and English professors are to be paid the same wage, $42.00. This results in a ________ (shortage/surplus) of ________ for economics professors and a ________ (shortage/surplus) of ________ for English professors.
◦ surplus, 95, surplus, 150
◦ shortage, 95, shortage, 210
◦ surplus, 420, shortage, 150
◦ shortage, 420, surplus, 210
Post by: bobbbbb on Nov 23, 2022
The market equilibrium occurs where the supply curve (S) intersects the demand curve (D).
In the market for economics professors, the market equilibrium price is P3=$62.50 and the market equilibrium quantity is Q2=420.
In the market for English professors, the market equilibrium price is P1=$83.00 and the market equilibrium quantity is Q5=285.
If comparable-worth legislation is passed, and the government requires that economic professors and English professors are required to be paid the same wage ($42.00), this sets a price ceiling in the market for economics professors and a price floor in the market for English professors.
In the market for economics professors with the price ceiling, Q1=325 professors are supplied and Q3=745 professors are demanded. This results in a shortage of economics professors of Q3 - Q1 = 745 - 325 = 420.
In the market for English professors with the price floor, Q4=225 professors are demanded and Q6=435 professors are supplied. This results in a surplus of English professors of Q6 - Q4 = 435 - 225 = 210.