Question: Suppose that the supply curve for schoolteachers is L_s = 20 000 + 350W and the demand curve for teachers is L_D = 100 000 – 150W, where L = the number of teachers and W = the daily wage.

a. Plot the supply and demand curves.

b. What are the equilibrium wage and employment level in this market?

c. Now suppose that at any given wage 20 000 more workers are willing to work as schoolteachers. Plot the new supply curve and find the new wage and employment level. Why doesn’t employment grow by 20 000?