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Equalizing Teacher Salaries. Consider a school that can hire two types of teachers, average and high quality. The vertical intercept of the supply curve for average teachers is $50, and the slope is $1 per average teacher. The vertical intercept of the supply curve for highquality teachers is $120, and the slope is $1 per highquality teacher. (Related to Application 2 on page 710.)
a. Initially, the wage for average teachers is $100 and the wage for high-quality teachers is $160. Draw the supply curves and compute the number of average and high-quality teachers.
b. Suppose that unionization levels-up the wage to $130: Both types of teachers earn a wage of $130. Use your supply curves to compute the number of average and high-quality teachers. How has the composition of the workforce changed?
c. Where have the high-quality teachers gone?
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Kean University Professor Henry Saffer and Wharton School of Business Professor Dave Dhaval estimated that if the alcohol industry increased the prices of alcoholic beverages by 100 percent underage drinking would fall by 28 percent and underage b..
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is where one player maximizes his payoff and the other doesn't.
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