The market equilibrium model predicts that the supply and demand schedules of labor to an industry will cross at a level at which labor receives the value of its marginal…
The market equilibrium model predicts that the supply and demand schedules of labor to an industry will cross at a level at which labor receives the value of its marginal product as contributed to the output produced. The imposition of an effective minimum wage in that industry creates a price floor for labor which will reduce employment as it promotes incentives to substitute capital for labor and/or workers with higher marginal productivity for those with lower skill and lower marginal productivity. This means in effect that it will lead employers to eliminate less productive jobs. Teenagers (youths 16–19 years old) with little training or work‐experience may be priced out of the market because they are not “worth” (in terms of productivity) the minimum wage.
This paper presents a behavioral economics model with bounded rationality to describe an individual's food consumption choices that lead to weight gain and dieting. Using a physiological relationship determining calories needed to maintain weight, we simulate the food consumption choices of a representative female over a 30-year period. Results show an individual will periodically choose to diet, but that diet will reduce weight only temporarily. Recurrence of weight gain leads to cyclical dieting, which reduces the trend rate of weight increase. Dieting frequency is shown to depend on decision period length, dieting costs, and habit persistence.
Many texts display circular indifference curves. The rationale for such curves typically requires that goods become bads — that is, their marginal utilities become negative — over some range (e.g., Baumol , p. 199). In this note we develop what seems to be a far more general and intuitively appealing rationale for “approximately circular” indifference curves. This rationale suggests that the phenomenon may be far more widespread than previous analysis implies.
Distribution concerns who gets what. But does “who” refer to the personal distribution of income among individuals or the functional distribution of income among suppliers…
Distribution concerns who gets what. But does “who” refer to the personal distribution of income among individuals or the functional distribution of income among suppliers of productive factors? For nearly 150 years, Anglophone distribution theory followed the Ricardian emphasis on functional distribution – the income shares of labor, land, and capital. Only beginning in the 1960s, and consolidated by a research outpouring in the early 1970s, does mainstream economics turn to the personal conception of distribution. This essay documents Anglophone (primarily American) economics’ move from functional to personal distribution, and tries to illuminate something of its causes and timing.