Consider the market for university economics professors.Suppose the opportunity cost of going to graduate school to get a Ph.D.in economics decreases for many individuals.Since it generally takes about five years to get a Ph.D.in economics,holding all else constant,what will happen to the equilibrium wage for university economics professors in five years?

Question

Quizplus · Accepted Answer

If the opportunity cost of obtaining a Ph.D. in economics decreases, more individuals may choose to pursue this path, leading to an increase in the supply of economics professors. This increase in supply would likely lead to a decrease in the equilibrium wage for university economics professors. Moreover, the five years it takes to obtain a Ph.D. in economics is long enough to allow for a substantial shift in market equilibrium.

Consider the Market for University Economics Professors