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I need an aswer for b) Suppose that Government is currently evaluating a project, which is going to hire native language teachers and requires in
I need an aswer for b)
Suppose that Government is currently evaluating a project, which is going to hire native language teachers and requires in total 6000 hours of teaching. Let's denote the hour taught by native language teacher by letter L. Thus, the project's demand for teaching hours by native language teachers is described by the demand function La project = 6000. Suppose that the following is known about the current (pre-project) market for native language teachers: - there is no involuntary unemployment among the native language teachers - the Government does not apply any taxes or subsidies in this particular labour market; - the current (pre-project) demand for teaching hours by native language teachers is described by the demand function La = 42000 - 400Wa, where Lu denotes the quantity of teaching hours (by native language teachers) demanded and Wadenotes the demander price per teaching hour; - the current (pre-project) supply of teaching hours by native language teachers is given by the supply function Ls = 200W., where Ls refers to the quantity of teaching hours supplied by native language speakers and W. denotes the supplier price per teaching hour; Suppose that there are no changes expected in the pre-project demand or supply functions during the start to the end of the project, i.e. the relationship between the price and the quantity demanded by others as well as the relationship between the price and the quantity supplied, remain described by the same functions as outlined earlier. a) Find the financial cost of the teaching hours demanded by the project? b) Find the social economic cost of the teaching hours demanded by the project? Illustrate the pre-project situation as well as the changes caused by the project in this particular labour market on the graph. Use numerical values and identify clearly the equilibrium in the market that exists prior to the project and the equilibrium that will exist in this market if the project gets implemented. Show on the graph clearly the area, which represents economic cost of labour hours, which Project requires Step by Step Solution
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