Plain Sense Economics

In Principles of Microeconomics this week we talked about labor markets and how wages should rise as worker productivity rises. In Principles of Macroeconomics this week we talked about the concept of “sticky wages” – where, in the short run employers adjust their production/output when demand falls, but don’t immediately adjust wages downward.
This article in [...]

In Microeconomics today we talked about how wages are set in part by the dollar value of the marginal product of labor (the incremental dollar value of adding one more worker) and the supply of those workers.
In his blog in October, Greg Mankiw pointed to a chart from PhDComics.com that is sure to warm the [...]