Economics Questions

Re: How do you answer this question

Caley McKibbin — Thu, 01 Apr 2010 02:37:02 GMT

Productivity and employment are unrelated. There is always something to do be done. It is labour controls that cause unemployment. By unemployment, we mean chronic inability to find work.

Re: How do you answer this question

DD5 — Thu, 01 Apr 2010 02:21:16 GMT

hayekianxyz:
Presumably the firm will still maximise profits by equating marginal cost with marginal revenue, and there's no reason to see why the demand curve (and hence MR curve) would shift in response to the change in technology, so the firm would simply maximise profits by expanding production until MR once again equals MC.

I wonder what will happen if you actually go ahead and give this BS advise to a real firm?

Re: How do you answer this question

wolfman — Thu, 01 Apr 2010 01:26:36 GMT

200 years ago there were few employment choices you could choose from and the standard of living was way lower than today's.

Anything, just anything that increases a worker's productivity creates wealth, new employement, new industries, higher standard of living.

Example: 200 years ago a bigger percentage of the population was devoted to agriculture, the entertaiment industry was limited and vacations like traveling abroad or a remote resort were virtually unheard of.

Today a minimal % of the US population works in agriculture (higher productivity), the entertaiment industry is everywhere, virtually everyone can buy a decent vacation at least once a year.

Re: How do you answer this question

clueless — Thu, 01 Apr 2010 01:05:14 GMT

read John Stossel books also.

Re: How do you answer this question

clueless — Thu, 01 Apr 2010 01:00:38 GMT

Thanks smiling dave. will check it out. Reading Basic Economics by Thomas Sowell now. I have read Jay Richards Money Greed and God, Thomas Dilorenzo How Captailism saved American(thats how I got interested in the first place) and Atlas Shurgged. Any more suggestions please keep them coming.

Re: How do you answer this question

clueless — Thu, 01 Apr 2010 00:53:33 GMT

Therefore, if a employer is more apt to keep a bad in employee in a free market then in a more regulated market you could say that the more unrestrained the market the more humane that market will be. I'm sure that will win me friends tomorrow. You guys are awesome.

Re: How do you answer this question

Smiling Dave — Thu, 01 Apr 2010 00:49:21 GMT

clueless:

hayekianxyz you lost me with that MR curve thing. Can someone explain Strangers point. I'm a truck driver, going into the break room and arguing for captailism and a free market, I need concepts that me and my co workers can wrap our little minds around.

I think hayek and stranger are talking about when workers get more productive because they get better tools. You are talking about when they work longer hours for the same pay, or goof off less. Which another thing altogether.

Good place to start for a general education in economics is Economics in One Lesson, by Henry Hazlitt.

It's a short book, free online right here

Re: How do you answer this question

Stranger — Thu, 01 Apr 2010 00:46:40 GMT

clueless:

Why is that stranger? I would think in a regulated market it cost more to hire and keep a bad enployee.

Yes, that's why you don't. As a result, the only people left in the sample are the highly productive workers. Consequently, productivity statistics increase.

Re: How do you answer this question

clueless — Thu, 01 Apr 2010 00:40:50 GMT

Why is that stranger? I would think in a regulated market it cost more to hire and keep a bad enployee.

Re: How do you answer this question

Stranger — Thu, 01 Apr 2010 00:35:05 GMT

clueless:

hayekianxyz you lost me with that MR curve thing. Can someone explain Strangers point. I'm a truck driver, going into the break room and arguing for captailism and a free market, I need concepts that me and my co workers can wrap our little minds around.

Basically what I'm saying is that if you're crap at your job, you might still be worth paying in a free market, but in a regulated market it's better to avoid you.

Re: How do you answer this question

clueless — Thu, 01 Apr 2010 00:29:01 GMT

hayekianxyz you lost me with that MR curve thing. Can someone explain Strangers point. I'm a truck driver, going into the break room and arguing for captailism and a free market, I need concepts that me and my co workers can wrap our little minds around.

Re: How do you answer this question

clueless — Thu, 01 Apr 2010 00:18:55 GMT

DD5 I printing your answer out also. My co-workers are making the same argument that Tucker made in her column. Bascially the boss is piling on more work just so he can make more profit. He could hire more workers but he is just greedy. Never thought that our current productivity protects our wage and enployment levels. Thanks again, I know that I have lowerd this boards I.Q. but where else do you turn to. You have put my feelings into logic and words. Hope I can continue to use this board as a resource. Thanks again!

Re: How do you answer this question

Stranger — Thu, 01 Apr 2010 00:07:20 GMT

No it is the opposite. High unemployment levels raise worker productivity because the marginally less productive workers are excluded from the labor market. See for example France which for many years had one of the highest worker productivity rates in the world, but also very high unemployment and an extremely regulated labor market.

Re: How do you answer this question

hayekianxyz — Wed, 31 Mar 2010 23:51:36 GMT

The argument is essentially that with an increase in technology and by implication productivity a firm can produce the same amount of output with less labour. Of course, this is merely another way of stating that with the same employment of labour an increase in productivity will lead to an increase in output levels.

Presumably the firm will still maximise profits by equating marginal cost with marginal revenue, and there's no reason to see why the demand curve (and hence MR curve) would shift in response to the change in technology, so the firm would simply maximise profits by expanding production until MR once again equals MC.

Re: How do you answer this question

DD5 — Wed, 31 Mar 2010 23:41:37 GMT

clueless:
This answer will also help me with the guys at work that believe if we work less productive the company will be forced to hire more workers.

If the productivity of the firm decreases, it will be less profitable to employ each worker. Not only will the incentive to hire more people decrease, but the job security of each current worker is shaken. If your guys at work manage to succeed in lowering overall productivity just enough, you may have to say goodbye to a few of them also.