Should all professors be paid the same? he following graphs show the supply of a

Question

Should all professors be paid the same? he following graphs show the supply of and demand for assistant professors in music (left) and in accounting (right) for a hypothetical university. Use he graphs to help you answer the following questions. Market for Assistant Music Professors Market for Assistant Accounting Professors 80 Demand 20 Demand 108 96 84 72 G 64 56 60 40 32 24 6 Supply 36 24 Supply 12 07 14 21 28 35 42 49 58 63 70 QUANTITY (Assistant music professors) 0 48 12 16 20 24 28 32 38 40 QUANTITY (Assistant accounting professors)

Explanation / Answer

Answer

We can see from left graph that quantity demanded and quantity supplied of Assistant professor in music at 48000 Hence equilibrium wage rate = $48000. Also These supply and demand of assistant professors in Music When quantity = 28. Hence equilibrium quantity is 28 assistant professors in Music.

We can see from Right graph that quantity demanded and quantity supplied of Assistant professor in Accounting at 72000 Hence equilibrium wage rate = $72000. Also These supply and demand of assistant professors in Accounting When quantity = 16. Hence equilibrium quantity is 16 assistant professors in Accounting.

ASSISTANT MUSIC PROFESSORS ASSISTANT ACCOUNTING PROFESSORS

If the university sets a wage of all assistent professors in every demartment there will be lesser accounting professors hired by university than there would be if university paid assistent Accounting professors there equilibrium wage. Similarly, If the university sets a wage of all assistent professors in every demartment there will be lesser accounting professors hired by university than there would be if university paid assistent music professors there equilibrium wage.

Note that If wage set is 48000 then number of music professors employed will be same but amount of accounting professors employed will be less because quantity supplies = 6 and hence they can maximum hire 6 Accounting Professors.

If wage set is 72000 then number of music professors employed will be only 7 as Quantity demanded = 7 but amount of accounting professors employed will be Same. Hence there will be lesser in Assistant professors hired.

Wage(Dollars) Quantity Demanded Quantity Supplied Shortage Or Surplus Quantity Demanded Quantity Supplied Shortage Or Surplus 48000 28 28 Niether Shortage Nor Surplus 24 8 Shortage of 16 72000 7 49 Surplus of 42 16 16 Niether Shortage Nor Surplus

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