From 1970 to 2017, the real price of a college education increased, and total enrollment increased. Which of the following could have caused this increase in price and enrollment?

A) A shift to the right in the supply curve for college education and a shift to the left in the demand curve for college education
B) A shift to the left in the supply curve for college education and a shift to the right in the demand curve for college education
C) A shift to the left in the supply curve for college education and a shift to the left in the demand curve for college education
D) none of the above

Question

Khnum Hayes · Accepted Answer

Final Answer : B, Explanation :  A shift to the left in the supply curve for college education would imply that colleges are producing fewer units of education and the price is higher. A shift to the right in the demand curve for college education would imply that people are demanding more units of education, which would also increase the price. Therefore, a shift to the left in the supply curve and a shift to the right in the demand curve, as in option B, would explain both the increase in price and enrollment. Option A would lead to an ambiguous effect on enrollment, while option C would result in a decrease in both price and enrollment, which does not align with the given data.

Definitions

Learning Objectives

Learning Objectives

Related questions