The graphs here show the supply of and demand for assistant professors in music

Question

The graphs here show the supply of and demand for assistant professors in music (left) and in engineering (right) for a hypothetical university. Use the graphs to help you answer the following questions WAGE (Thousands of dollars) WAGE (Thousands of dollars) 100 150 Supply Supply 80 120 60 90 40 60 Demand Demang 20 30 12 24 36 48 60 12 24 30 QUANTITY (Assistant music professors) QUANTITY (Assistant engineering professors) The equilibrium wage of an assistant professor in music is and the equilibrium quantity is assistant professors in music. On the other hand, the equilibrium wage of an assistant professor in engineering is and the equilibrium quantity is assistant professors in engineering.

Explanation / Answer

(a)

Equilibrium wage for Assistant professor in Music is $60,000 and equilibrium quantity is 24.

Equilibrium wage for Assistant professor in Engineering is $90,000 and equilibrium quantity is 12.

(b) Shortage = Quantity demanded - Quantity supplied & Surplus = Quantity supplied - Quantity demanded

(c)

If University sets a wage of $60,000, there will be 6 less (= 12 - 6) Assistant professors in Engineering.

If University sets a wage of $90,000, there will be 18 less (= 24 - 6) Assistant professors in Music.

ASSISTANT MUSIC PROFESSORS ASSISTANT ENGG PROFESSORS Wage Quantity demanded Quantity Supplied Shortage/ Surplus Quantity demanded Quantity Supplied Shortage/ Surplus $60,000 24 24 None 18 6 Shortage = 12 $90,000 6 42 Surplus = 36 12 12 None

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