Suppose That This Graph Describes the Current Labor Market for High

question 37

Multiple Choice

Suppose that this graph describes the current labor market for high school teachers:
If wages are currently W*,

• A) there will be a shortage of certified teachers.
• B) there will be a surplus of certified teachers.
• C) the market is in equilibrium: neither a shortage nor a surplus exists.
• D) teachers are underpaid.

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Definitions:

Government Provision

Public goods and services provided by the government for the benefit of its citizens.

Total Surplus

The sum of consumer surplus and producer surplus, representing the total net benefit to society from the production and consumption of a good or service.

Cost-Benefit Analysis

An economic evaluation method that compares the relative costs and benefits associated with a proposed project or decision.

Opportunity Cost

The worth of the best alternative given up when a decision is made.