Question

In the current labor market, suppose that the wage rate for accountants is significantly higher than the wage rate for economists. In the long run, if you observed that the wage rate for economists rose while the wage rate for accountants fell, which of the following would best explain your observation?
(A) The supply of economists must have increased, and the supply of accountants must have decreased.
(B) The supply of economists must have decreased, and the supply of accountants must have increased.
(C) The demand for economists must have increased, and the supply of accountants must have decreased.
(D) The demand for economists must have decreased, and the supply of accountants must have increased.

Answer 1

The best explanation for the rise in economist salaries and the fall in accounting salaries would be (B) The supply of economists must have decreased, and the supply of accountants must have increased.

Why is this the best explanation?

When there is a decrease in the supply of a commodity, its prices will go up. The salaries of economists went up because the number of economists available, decreased.

When there is an increase in the supply of something, the price will decrease. This is why the accountants saw their salaries decrease - the number of accountants available increased.

In conclusion, option B is correct.

Find out more on demand and supply at brainly.com/question/4804206.