Tradeoff between Leisure and Wages

… a core concept in Economic Analysis and Atlas102

Concept description

Alex Tabarrok (reference below, video on right) explores the relationship between xxx

Tabarrok shows that

Practice questions

From http://www.mruniversity.com/node/301759, accessed 8 May 2016.

1. Let’s apply the idea of compensating differentials to janitorial jobs. Suppose there are two quite similar restaurants in the same town, Orange Bee’s and the City Inn. Both have the same demand for janitorial labor. But all the janitors in town know that it’s much more fun to work at City Inn. Which restaurant will pay a higher wage for janitors?
   1. Orange Bee’s
   2. City Inn 
   3. Both restaurants pay the same wage
2. Which restaurant will hire more janitors?
   1. Orange Bee’s
   2. City Inn 
   3. Both restaurants will hire the same number of janitors

Source

Alex Tabarrok, The Tradeoff Between Fun and Wages (3-minute video), Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-microeconomics/tradeoff-wages-no-such-thing-as-free-lunch, accessed 8 May 2016.

Atlas topic and subject

Labour Markets (core topic) in Economic Analysis and Atlas102.

Page created by: Ian Clark, last modified on 8 May 2016.

Image: Alex Tabarrok, minute 0:15 in The Tradeoff Between Fun and Wages (3-minute video), Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-microeconomics/tradeoff-wages-no-such-thing-as-free-lunch, accessed 8 May 2016.