Most public school districtsset theirsalaries based onlyon teaching experience andwhether you have a master's degree. The subject or grade that you teach doesn't affect the salary at all. However, some subjects (English) or grades (elementary) are much more popular to teach, while others (Math, high school) are much less popular. Universities, in contrast, pay market-based salaries for every subject. These differsubstantially though the qualification for becoming a professor isthe same in almost every field (a Ph.D., which typically takes five years to complete).

a. Draw a pair of supply/demand graphs for professors in two fields, Math and English. Identify the equilibrium salary in each field. What would we call the difference in these salaries?

b. Draw a pair ofsupply/demand graphsfor teachersin two fields, Math and English. Assume that the school district sets the salary in between the equilibrium for Math and the equilibrium for English. Which field has a surplus of teachers? Which has a shortage? Clearly identify the shortage /surplus on the relevant graph.

c. On the back, you will find a graph that relatesthe fraction of economically disadvantaged children in a school to the percentage of inexperienced teachersin thatschool, taken from recent data for a number of elementary schoolsin the Cy-Fair ISD, the largestschool district in Texas. (Each dot is a school; the line isthe regression line that bestfitsthe pointsin the graph.) Explain howthe absence of compensating wage differentials can generate the pattern shown in the graph.

Cy-Fair ISD, 2014 50 45 40 35 30 25 Five Years of Experience 20 Percent of Teachers with at most 15 20 40 60 80 100 Percent of Economically Disadvantaged Students in the School