Question

At some colleges and universities, economics profes- sors receive higher salaries than professors in some other fields.

a. Why might this be true?

b. Some other colleges and universities have a policy of paying equal salaries to professors in all fields. At some of these schools, economics professors have lighter teaching loads than professors in some other fields. What role do the differences in teaching loads play?

Answer 1

a) the salaries difference can be attributed to the differences in demand and supply and consider the case that the supply of economic professor is very low as a result of which the wage should be high on the salary should we have in order to attract them similarly consider the demand for economics professor are very fine then even in this place in order to out beat the competition you have to give more salaries that is the reason why economics professors can have high salaries

b) the difference in teaching loads can make up to the difference in salaries, assuming to be a rational choice the salary per week divided by the the number of hours per week should be maximum and therefore even if the salary is high, is not always that is the best option as the workload difference can be there and that is the reason why one has to make sure that the ratio remains in control and this workload plays a major role in determining the optimal choice