1). Do We Need Another Movie Like "Top Gun?" (25 points) (graphs required)

The US military has claimed that there may soon be a shortage of fighter pilots. The Pentagon predicts that if actions are not taken the shortage will get much larger in the coming 3-5 years. As background information, you should know that both the demand and wages of commercial pilots has risen over the past five years (which you should see as a substitute for military pilots).

a). First, graph and explain economically what the Pentagon might mean by a shortage? (note: the demand for fighter pilots is fairly inelastic) Would micro see this shortage as an inefficiency? If so, show the deadweight loss. (10 points)

b). Explain how the information about commercial pilots might have affected the market for military pilots. (5 points)

c). Provide three efficient solutions to solve the coming shortage of fighter pilots and graphs your solutions. (10 points)