Asked by Mackenzie Dolishny on Jun 18, 2024
Verified
Suppose you had the choice of attending two universities. University A pays all of its professors the same wage and awards the same raises. University B pays each professor according to market wages and productivity. Which university would you rather attend and why?
Market Wages
The prevailing rate of pay for work or services at a particular time and place, determined by supply and demand in the labor market.
Productivity
The efficiency with which inputs are converted into outputs in a production process, often measured as the ratio of output to input over a specific period.
- Elucidate the link between the distribution of income and economic motivators, including participation in the labor market and levels of productivity.
- Assess the merits and drawbacks of income and wealth redistribution, taking into account both its impact on economic efficiency and ethical implications.
Verified Answer
LB
Lorrie Bowman6 days ago
Final Answer :
It would appear that the professors at university A have less incentive to provide quality instruction than those at university B. They are rewarded equally, regardless of how well students are educated. If the measure for productivity at university B is how well the students are educated (this may be a heroic assumption), you will be better off there.
Learning Objectives
- Elucidate the link between the distribution of income and economic motivators, including participation in the labor market and levels of productivity.
- Assess the merits and drawbacks of income and wealth redistribution, taking into account both its impact on economic efficiency and ethical implications.