Question

Demand Demand SALARY (Thousands of dollars) SALARY (Thousands of dollars) 88 & Supply Supply 0 5 10 15 20 25 30 35 40 45 50 QUANTITY (Assistant art history professors) 40 4 8 12 16 20 24 28 32 % QUANTITY(Assistant biology professors) WGAGE day! The equilibrium wage of an assistant professor in art history is $2.000, and the equilibrium quantity is 20 assistant professors in art history. On the other hand, the equilibrium wage of an assistant professor in biology is $108,000, and the equilibrium quantity is 16 assistant professors in biology. Suppose the university sets the same wage for all assistant professors across all departments. Fill in the following table with the quantity demanded and supplied for each type of assistant professor when the university sets the wage at $72,000 and $108,000, respectively University Wage (Dollars) Assistant Art history Professors Quantity Quantity Shortage or Demanded Supplied Surplus Assistant Biology Professors Quantity Quantity Shortage or Demanded Supplied Surplus Shortage Neither 72,000 108,000 Surplus In summary, if the university sets a wage of $72,000 for all assistant professors in every department, which is equivalent to a price ceiling for biology professors, there will be assistant biology professors hired by the university than there would be if the university paid assistant biology professors their equilibrium wage. Similarly, if the university sets a wage of $108,000 for all assistant professors in every department, which is equivalent to price floor for art history professors, there wil be assistant art history professors hired by the university than there would be the university paidastant art history professors their equilibrium wage.

Answer 1

The equilibrium wage of an assistant professor in art history is $72,000, and the equilibrium quantity is 20 assistant professors in art history. On the other hand, the equilibrium wage of an assistant professor in biology is $108,000, and the equilibrium quantity is 16 assistant professors in biology.

If fixed wage set is $72000 then the quantity demanded for assistant art history professor is 20 and the quantity supplied of assistant art history professor is 20. Hence , there is neither shortage nor surplus of assistant art history professor. At this wage, the quantity demanded for assistant art biology  professor is 24 and the quantity supplied of assistant art history professor is 8. Hence , there is a shortage of assistant art biology professor.

If fixed wage set is $108,000 then the quantity demanded for assistant art history professor is 5 and the quantity supplied of assistant art history professor is 35. Hence , there is a surplus of assistant art history professor. At this wage, the quantity demanded for assistant art biology  professor is 16 and the quantity supplied of assistant art history professor is 16. Hence , there is neither shortage or surplus of assistant art biology professor.

In summary,In summary, if the university sets of wage of $72,000 for all assistant professors in every department, which is equivalent to a price ceiling for biology professors, there will be 8 less assistant biology professor is hired by the university than there Would be if the university paid assistant biology professor their equilibrium wage. Similarly, if the university sets a wage of  $108,000 for all assistant professors in every department, which is equivalent to a price floor for art history professors, which is equivalent to a price floor for art history professors, there will be 15 less assistant art history professor is hired by the University than there would be if the university paid assistant art history professors their equilibrium wage.