Economist: Although average hourly wages vary considerably between different regions of this country, in each region,...

Naryan-Shukle on April 20, 2022

Hi @alannadels,

Everything you are thinking is correct, except that last part. Hourly rates did NOT increase, they decreased. This is exactly what the stimulus says, which they believe is a paradox. Let's illustrate with an example.

Last year, the average grade in every class at TestMax High went up: physics went from an F average to a D average, and PE went from a B average to an A average. But overall, the school's grade average went down.

Now, what if there were 100 kids taking PE, and 1 kid taking physics? What (B) suggests is that 99 kids moved from PE to physics. Even though they are getting D's and not F's, all those kids WOULD have been getting B's before, so the average grades for the school has gone down.

Hope this helps! If you need any more clarification don't hesitate to ask!