Econ Lecture 8 Pegs

Econ Lecture 8 Pegs - Alfred Marshalls Elasticity invented...

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Econ Lecture 8 Pegs / end of test mat. 15:04 Advocate of the living wage – has no effect (economic error) The higher you make the living wage, the smalle labor employed Error – by paying low income a higher wage – they will work harder and be more  productive – and employer is better off Denies the rational self interest of economic theory Almost every econ policy-  involves trade offs Higher wages for some ppl and some unemployment for others Some time to adjust Why is it that all labor unions and eng societies – support raising minimum wage Concern for poor people – who will remain employed and lack of concern for  people who are employed Who makes capital equipment?  o Engineers and labor unions Self interest in engineers and labor unions Wil l increase the demand for labor unions
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Unformatted text preview: Alfred Marshalls Elasticity invented elasticity Income elasticity p becomes income instead of price what happens when your income goes up 10 % Market Share elasticity q becomes SOM o If we raise the price of a good - what happens to our share of the market Raise your advertising budget by a percent what happen to the qt demanded Advertising elasticity p becomes advtg budget Cross elasticity two goods involved trying to figure out how close are products substitutable are they how close are they in product space. Red losing money Black and Red Market for Illegal goods Involuntary wealth transfer=robbery Price Taxonomy of Elasticity Applications of Elasticity Private Sector Public Sector 15:04 15:04...
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Econ Lecture 8 Pegs - Alfred Marshalls Elasticity invented...

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