The Labor Market: 2. Permanent Unemployment

In the last post I showed that the market for unskilled, unregulated labor is perfectly competitive. The econ-speak definition of that is “a market in which profit is maximized when price equals marginal cost.” And in the case of laborers: Profit Maximization = working at all, instead of starving Marginal Cost = subsistence We also said that… Continue reading The Labor Market: 2. Permanent Unemployment

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Unemployment Business Cycle, The Labor Market: 1. Basics

It is often said that “perfect competition” doesn’t actually happen in the real world, that it is merely a theoretical ideal used to illustrate points in Econ texts. The goods commonly cited as examples of perfect competition — agricultural goods such as wheat, corn, soybeans, etc. — are often provided with public support in the… Continue reading Unemployment Business Cycle, The Labor Market: 1. Basics

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