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    Market Economies

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    Everyone would agree that economists are far less important to an economy than sanitation workers are, yet in market economies economists usually earn more than sanitation workers do. Why in market economies do relatively less valuable economists receive higher wages than absolutely vital sanitation workers?

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    The relatively less 'valuable' economists receive higher wages than the absolutely vital sanitation workers because wages are determined by the marginal utility of the services provided by the person. Now because sanitation workers have a lower marginal utility because of high supply, they receive lower salaries. The total utility of sanitation ...

    Solution Summary

    Market Economy is explained in a structured manner in this response. The answer includes references used.