7. Consider the price elasticity of demand for bachelor\'s degrees in price elas

Question

7. Consider the price elasticity of demand for bachelor's degrees in price elasticity of demand for bachelor's degrees in the long run, pr demand for medial degrees in the short run, and the price elasticity o medical degrees in the long run: the short run, the ce elasticity of emand for a. H ow would the price elasticity of demand for bachelor's degrees change from the short-run to the long-run? How would the price elasticity of demand for medical degrees change from the short-run to the long-run? For which type of degree (bachelor's or medical degrees), would you expect the price elasticity of demand to change more between short-run and long- c. run? You work for the US Department of Education, and you and your boss are evaluating two potential programs: (1) a $1000 grant for all recipients of a bachelor's degree in the US and (2) a $1000 grant for all recipients of a bachelor's degree in education in the us. The cost of either program would be $1,000 per graduate. You and your boss discover that there are 1,900,000 bachelor's degrees awarded each year in the US and 92,000 bachelor's degrees in education awarded each year in the US. Your boss estimates that the annual cost of the first program would be 1,900,000 x $1,000- $1,900,000,000 ($1.9 billion) and the annual cost of the second program would be 92,000 x $1000 $92,000,000 ($92 million). As a percentage of the actual cost of each program, which of his estimates is likely to be less accurate? Please explain. 8.

Explanation / Answer

A) the demand for bachelor's degree will be more elastic in the long run than in the short run. Because people take time to change their taste and prefrences and students can get time to find substitutes.

B) the demand for medical degree would be more elastic in the long run than in the short run.

C) the change in the price elasticity of demand would be greater for medical degrees because of the availability of more substitutes for medical schools.

Related Questions

Navigate

• Browse (All)
• Browse 7
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.