Scenario 18-6 Suppose the Following Events Occur in the Market for University

question 140

Multiple Choice

Scenario 18-6
Suppose the following events occur in the market for university economics professors.
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Event 1: A recession in the U.S. economy lowers the opportunity cost of going to graduate school in economics to become a university economics professor.
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Event 2: An increasing number of students in U.S. primary and secondary schools increases the number of students entering college, increasing the output price of university economics professors' services.
-Refer to Scenario 18-6. As a result of these two events, holding all else constant, the equilibrium wages of university economics professors will

• A)increase.
• B)decrease.
• C)not change.
• D)not be able to be determined without more information.

Comprehend and calculate combinations and understand the difference between combinations and permutations.

Understand the fundamental principles of probability, including sample spaces, mutually exclusive events, and conditional probability.

Construct and analyze sample spaces for various scenarios and calculate probabilities based on these spaces.

Apply the multiplication principle to calculate the total number of possible outcomes in a given scenario.

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Definitions:

Absolute Advantage

The ability of a country or entity to produce a good using fewer resources than another producer, indicating higher efficiency.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than its competitors, leading to more efficient trade benefits.

Opportunity Cost

The forfeiting of possible gains that could be obtained from exploring other options, when one is chosen.

Absolute Advantage

The capacity for a nation, person, corporation, or area to manufacture a product or render a service at a more affordable per-unit expense than what any other party can achieve.