Aggregate production and factor markets
Not what you're looking for?
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?
Purchase this Solution
Solution Summary
Effects of technological progress are analyzed according to the neoclassical theory
Solution Preview
A. According to the neoclassical theory farmers real wage should have increased.
B. If the productivity has remained ...
Education
- BSc, Dokuz Eylul University
- MBA, Texas A&M University-Kingsville
Recent Feedback
- "Thanks"
- "Thanks"
- "This is a great help...Thank you"
- "Thanks for the advice!"
- "Oh my gosh u are awesome... A++"
Purchase this Solution
Free BrainMass Quizzes
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.