is a question about how they relate to an equilibrating market price.
And this is, to my mind, a misleading though possibly useful simplification. People exhibit path dependence, moods, have issues of pride, resentment, have possibly fluctuating principles and energy levels, etc. Pretending that there is a single market price at which someone would work at, and using this to distinguish between unemployed and nonemployed might be useful in a model, but is a mistake if taken as a view of reality (and can lead to excessive respect for concepts such as “revealed preferences”, which are are only partially true).
There’s a reason that people stereotype economics as over-simplified, and its because many people do use the models in an over-simplified manner.
I feel the same about “irrational”. Someone can be economically rational while behaving in a stupid, counter-productive, and biased fashion. However, because of the connotations of “rational” in everyday speech, some people seem to feel that that’s not possible.
People will work at many prices. I’ll work practically anything at a million dollars an hour, and even more so at a billion dollars an hour. There are rather fewer prices, however, that will equate quantity supplied to quantity demanded, where both quantity supplied and quantity demanded should be understood as points on a supply/demand schedule describing the amount people want to sell/buy at that particular price.
I’m working on a series of articles about economics I hope to start posting fairly soon. I’m sure you’ll find them interesting....
Cheers!
And this is, to my mind, a misleading though possibly useful simplification. People exhibit path dependence, moods, have issues of pride, resentment, have possibly fluctuating principles and energy levels, etc. Pretending that there is a single market price at which someone would work at, and using this to distinguish between unemployed and nonemployed might be useful in a model, but is a mistake if taken as a view of reality (and can lead to excessive respect for concepts such as “revealed preferences”, which are are only partially true).
There’s a reason that people stereotype economics as over-simplified, and its because many people do use the models in an over-simplified manner.
I feel the same about “irrational”. Someone can be economically rational while behaving in a stupid, counter-productive, and biased fashion. However, because of the connotations of “rational” in everyday speech, some people seem to feel that that’s not possible.
People will work at many prices. I’ll work practically anything at a million dollars an hour, and even more so at a billion dollars an hour. There are rather fewer prices, however, that will equate quantity supplied to quantity demanded, where both quantity supplied and quantity demanded should be understood as points on a supply/demand schedule describing the amount people want to sell/buy at that particular price.
I’m working on a series of articles about economics I hope to start posting fairly soon. I’m sure you’ll find them interesting....