Suppose the following two events occur in the market for elementary school teachers:
a.Overcrowded schools and education budget cuts have discouraged young university students from pursuing careers in teaching.
b.With an increasing birth rate,the number of children entering the primary 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 primary school teachers fall.
B) The equilibrium wage rises and the effect on the equilibrium quantity of primary school teachers is indeterminate.
C) The equilibrium quantity falls and the effect on the equilibrium wage of primary school teachers is indeterminate.
D) The equilibrium quantity falls and the equilibrium wage of primary school teachers rises.

Question

Suppose the following two events occur in the market for elementary school teachers: 
a.Overcrowded schools and education budget cuts have discouraged young university students from pursuing careers in teaching.
b.With an increasing birth rate,the number of children entering the primary 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 primary school teachers fall.
B) The equilibrium wage rises and the effect on the equilibrium quantity of primary school teachers is indeterminate.
C) The equilibrium quantity falls and the effect on the equilibrium wage of primary school teachers is indeterminate.
D) The equilibrium quantity falls and the equilibrium wage of primary school teachers rises.

Quizplus · Accepted Answer

The supply of teachers decreases due to discouragement, while demand increases due to more children. This raises wages, but the quantity effect is indeterminate as supply decreases and demand increases.

Suppose the Following Two Events Occur in the Market for Elementary