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 elementary 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?

Question

Quizplus · Accepted Answer

Event a reduces the supply of teachers by discouraging new entrants, which would tend to increase wages. Event b increases the demand for teachers due to more children entering the system, which also tends to increase wages. The overall effect on the quantity of teachers is indeterminate because the decrease in supply and increase in demand have opposing effects on quantity.

Suppose the Following Two Events Occur in the Market for Elementary