The Equilibrium Wage Paid to College Professors Is Generally Thrice

question 91

Multiple Choice

The equilibrium wage paid to college professors is generally thrice that of kindergarten teachers.The correct explanation for this difference in wages is:

• A)the excess demand for kindergarten teachers as compared to college professors.
• B)the higher funds available to universities as compared to schools.
• C)the high investment required to become a college professor.
• D)the lower value placed by society on kindergarten teachers.

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Definitions:

Marginal Revenue

The incremental revenue procured by selling an extra unit of a product or service.

Marginal Cost

The cost of producing one additional unit of a product or service, crucial for pricing and production decisions.

Purely Competitive Firm

A business operating in a market where there are many buyers and sellers of a homogeneous product with no single entity able to influence the market price.

Normal Profits

The minimum level of profit needed for a company to remain competitive in the market, also seen as the opportunity cost of capital.