Week 8 - Starving Artists: Basic Facts

Question 1

Market Clearing

Answer 1

where the supply and demand curve intersect

Question 2

How is the market clearing misleading for the artistic market?

Answer 2

-indictaes that there are a moderate number of artists who tend to make a moderate amount of money

This would be a true of the artistic market reflected a normal labor market, however this is not the case

Question 3

What do supply and demand represent in the artistic market?

Answer 3

demand and supply for artistic labor

Question 4

What is different about the supply curve for artistic labor markets?

Answer 4

Supply is very high, so supply curve shifts to the right

more people are willing to do art for less money

Question 5

What are the two basic arguments for why there is a right-shifted supply curve?

Answer 5

1. Tournament Model
2. Self-subsidy

Question 5

What is the market clearing actually like for the artistic labor market?

Answer 5

-market clearing is at a lower price but a higher quantity
-since the supply curve is shifted right, quantity supply goes up and price goes down – this is why artists don’t make much