A. Over the past century, the productivity of farmers has risen substantially because of technological progress. According to the neoclassical theory, what should have happened to their real wage?
B. Over the same period, the productivity of barbers has remained constant. Suppose workers can move freely between farmers and being barbers. What does this mobility imply for the wages of farmers and barbers?
C. What do your previous answers imply for the price of haircuts relative to the price of food?
D. Who benefits from technological progress in farming - farmers or barbers?© BrainMass Inc. brainmass.com October 25, 2018, 9:21 am ad1c9bdddf
A. According to the neoclassical theory farmers real wage should have increased.
B. If the productivity has remained ...
Effects of technological progress are analyzed according to the neoclassical theory
1) Explain the difference between the short run and the long run as it relates to the firm's production function. Why is this distinction important to a firm's manager?
2) Explain why a firm maximizes its profits by producing the level of output at which marginal revenue equals marginal costs.
3) Explain how labor resistance and political and legislative influences reduce the ability of firms to minimize their costs of production. What do the two have in common in this regard?
4) What are the two primary factors that influence a firm manager's choice between a labor-intensive and a capital-intensive method of production? How does each factor influence the manager's choice?
5) Summarize the relationship between elasticity, price changes, and changes in total revenue.
6) Distinguish between "a change in demand" and "a change in quantity demanded." What are the causes of each type of change and how do we illustrate them graphically?
7) List the factors that influence supply. How does a change in each of factors you have listed affect the supply curve?View Full Posting Details