Suppose in Philadelphia the quantity of economists demanded is less than the quantity supplied by 2,000 economists.As a result,
A) there is a shortage of economists in Philadelphia.
B) salaries for economists fall.
C) there is equilibrium in this market.
D) the labor supply curve for economists in Philadelphia is vertical.
E) the labor demand curve for economists in Philadelphia shifts rightward.

Question

Quizplus · Accepted Answer

When the quantity of economists demanded is less than the quantity supplied by 2,000 economists, there is an excess supply of economists. This excess supply puts downward pressure on economist salaries, leading to a fall in salaries (as indicated in option B). Therefore, option B is the best choice. Option A cannot be correct in this scenario, as there is actually an excess supply of economists, not a shortage. Option C cannot be correct either since there is an excess supply. Option D is not necessarily correct or applicable as the labor supply curve may not be vertical. Option E is also not correct as there is no indication that labor demand has shifted rightward.

Suppose in Philadelphia the Quantity of Economists Demanded Is Less