Question

Teachers vs. Movie Stars We all know how important quality education is for our society. It is an investment in human capital and there is a strong statistical link between quality of human capital and prosperity of the country. Better education improves productivity and makes people better decision makers. Main factor in achieving this is a good teacher. Yet, teacher compensations are fairly modest. According to Illinois News Network (Links to an external site.)Links to an external site., in May of 2018, Illinois lawmakers approved legislation that requires school districts to pay teachers at least $40,000 a year by the 2022-23. Minimum teacher salary for 2019 is set at 32,076. Glassdoor.com (Links to an external site.)Links to an external site. puts an average teacher salary in Illinois at $52,363/yr. On the other hand, movie starts are much less important for the society. Yet, when it comes to compensations, they are getting paid millions (Mark Wahlberg tops Forbes list of Hollywood’s Highest-Paid Actors with an estimated $68 million in earnings in 2017 (Links to an external site.)Links to an external site.) QUESTION: How this phenomenon may be explained using supply and demand model? (We have two markets, market for teachers and market for movie stars, that you need to analyze independently from one another). Make sure to: use glassdoor.com (Links to an external site.)Links to an external site. or other sources to find more statistics about teachers' compensation (you may look up your school district, another state or a country). Include data that you found in your post to support your answer. use correct terminology and demonstrate understanding of concepts from chapter 3 in your post.

Answer 1

as we all know from our understanding of demand supply model, it simply says that if a good or service is demanded more its price will increase and vice versa. here in this case movie star entertain a large group of population and are demanded more than deachers. to make it simple i can say education is demanded by a certain age group and so are the teachers are demanded but entertainment is demanded by everyone irrespective of any age group. so the people demanding the movie stars are way more larger than the people who are demanding a teacher.and as the law of demand states, if demand increases then price of it also increases. so here movie stars are paid much more than teachers. no matter how valuable or invaluable a thing is to the society the law of demand does not takes it to consideration because it only deals with quantity and not quality.for example in INDIA the average salary of teachers is around 30000INR per month while the movie stars get 5-10 crores per movie they do which is more than 100 times larger than what teachers get. so here the simple demand supply rule applies.