Midterm1_v1_Fall2013_Solution

14 the following table shows the supply and demand

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Unformatted text preview: hat any value between the two opportunity costs, i.e, (0.5, 2.5) will suffice. 3. [10%] With the understanding that people respond to incentives, outline the possible outcome for teachers if the K- 12 school year is extended to 11 months per year instead of the existing 9 months per year. The concept of working longer per year would be perceived by many teachers as a definite increase in the cost of teaching. Even with additional compensation, many teachers look at summers off as a major benefit of the education profession. If this benefit were eliminated or diminished, some teachers may perceive that the marginal cost of teaching would now be greater than the marginal benefit and would choose to leave teaching. 4. [14%] The following table shows the supply and demand schedules in a...
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