In a closed economy, A) I = Y + C + G. B) I = Y - C - G. C) I ...

[cmoore54]

In a closed economy,
 
  A) I = Y + C + G. B) I = Y - C - G. C) I = Y - C + G. D) I = Y + C - G.

Question 2

Equal pay for work of comparable worth is the idea that certain jobs, though completely different, must have the same pay because they are deemed to be of similar value.
 
  For example, an X-ray technician's job may be deemed to be as valuable as a dental assistant's job and therefore, both these jobs should be paid the same salaries. Implementing equal pay for comparable worth has been suggested as a measure that would reduce discrimination and inequality in the job market. Do you agree? What could be the other possible effects of such a policy? Explain your answer.

[Laurenleakan]

Answer to Question 1

B

Answer to Question 2

The demand for labor depends on the value of the marginal product of labor (VMPL). This is determined by the productivity of workers and the price of the final good in the market. One of the main problems with using comparable worth to decide wages is how to decide the comparable worth of different professions. A dental assistant's VMPL could be different from an X-ray technician's VMPL. Setting the same wages for workers in both these occupations, irrespective of their VMPL, is similar to setting price controls in a market and is likely to lead to shortages in the market with higher VMPL and surpluses in the market with lower VMPL; comparable worth takes away the incentive for workers to migrate to higher wage jobs.
See http://www.cato.org/pubs/pas/pa038.html

[cmoore54]

TYSM

[Laurenleakan]

Excellent