Economics @ ITT

States hire foreign teachers to ease shortages

Posted in microeconomics by ittecon on September 15, 2008

I saw this article the other day on MSNBC about a shortage of teacher in the US. In a free market, a shortage cannot exist except in the short term.  When the corporate media uses the term shortage, it is usually coded-speak for firms don’t want to pay more money to bring the supply into equilibrium. The demand for teachers is higher than the supply of nurses.  What this means, hypothetically,  is that the market is offering $40,000 a year for teachers in an environment that teachers may be willing to work for $50,000, and there is a disconnect.  The solution is not to import teachers—although it is one solution. The solution is to pay them more. This would be an incentive to teachers to enter the profession.

This can be demonstrated by the classic graph of supply-demand:

Disequilibrium

Disequilibrium

Schools are offering a wage of P3. At P3, they are expecting Q3 teachers; however, at this wage (price) point, teachers are only willing to supply Q1. No surprises here. If schools really need Q3 teachers, they would have to pay wages of P1.   In any case, a market clearing equilibrium can be gained by paying P2.

Here are some other articles on the matter of shortages:

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Newsweek: To Work or Not?

Posted in microeconomics by ittecon on September 13, 2008

A new study finds that children of privileged families fare worse when the mother works outside the home. But what does the research really tell us?

By Mary Carmichael | Newsweek Web Exclusive
Sep 11, 2008 | Updated: 8:23 p.m. ET Sep 11, 2008

Read the full article.

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Microeconomics GE273

Posted in microeconomics by ittecon on September 2, 2008

The structure is in place for Microeconomics GE273. Information includes a weekly summary of topics and assignments. Links to external resources are provided where necessary and available. I will be expanding this blog to include more information as time allows.

Welcome!

Posted in welcome by ittecon on September 1, 2008

Welcome to my blog. This blog has been created in order to support the students in my economics classes at ITT Technical Institute in Mount Prospect, IL. It has little public use, but feel free to browse anyway.

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