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Microeconomics

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Elasticity: Pay the Troops

MICRO-1KPCEQ

After the Vietnam war, many soldiers came home and, as a benefit, given to the troops who served were free or low-cost college educations. As a result, the number of college-educated workers shot up very high. As you would expect given supply and demand, the wage paid to college-educated workers dropped.

In the decades since, the wage paid to college-educated workers has risen back to about where it started. What is an explanation for this?

A

The number of college-educated workers has shrunk back to its original level.

B

A law was passed requiring veterans to be paid higher wages.

C

Demand gets more elastic over time.

D

Supply gets more elastic over time.