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Microeconomics I: Economic thoughts 09&12/10/17 :fire: (economic…

- - - - Ricardian Model
        
        rate of profit equalised
        
        an average rate of profit
      - Based on
        
        Malthus on population
        
        Smith on Labour theory value
        
        rent is determined by wages
        
        Turgot on land rent - a residual marginal product
      - Labour theory of value: the value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not on the greater or less compensation which is paid for that labour
    - - Natural Progression
        
        domestic manufacturing
        
        foreign trade
        
        agriculture
      - Laissez Faire (自由放任主義) / The Invisible Hand
      - Value & Distribution (between social classes)
      - Y(total income) = W(wages) + R(rents) + S(profits)
        = P x Q <value of goods produced>
      - Market Prices(短期) & Natural Prices(長期)
    - - labour theory of value - average socially necessary labour time
      - surplus value
      - falling rate of profit
      - goods / machines (embodied labour = c) / labour power (living labour)
        
        surplus value arises
        
        value paid to worker < value added
        
        can buy labour power
        
        exploitation = appropriation of surplus value (rate of exploitation = living labour unpaid = s / living labour paid = v)
        
        competition and the rate of profit
        
        rate of profit (r) = s / (c+v)
        
        intensity of mechanisation (k) = c / (c+v)
        
        average cost per chair = (c+v) / q
      - more wealth at more affordable prices
      - capitalist competition is inherently contradictory
    - - Labour and land combine to generate output
        
        The law of diminishing average product of labour
        
        As more labour is used in a given production process, the average product of labour typically falls
        
        Population expand if living standards increase
        
        Malthusian trap - self correcting mechanism (back to subsistence)

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Microeconomics I: Economic thoughts 09&12/10/17 🔥

Microeconomics I: Economic thoughts 09&12/10/17 🔥

econ10221@manchester.ac.uk (for tutorial absence)

economic thought

classical economics

neoclassical economics: "Economics is the science which studies human
behaviour as a relationship between ends and
scarce means which have alternative uses.“

David Ricardo

Adam Smith

Karl Marx

Robert Malthus

Natural Progression

domestic manufacturing

foreign trade

agriculture

Laissez Faire (自由放任主義) / The Invisible Hand

Value & Distribution (between social classes)

Y(total income) = W(wages) + R(rents) + S(profits)
= P x Q <value of goods produced>

Market Prices(短期) & Natural Prices(長期)

Ricardian Model

rate of profit equalised

an average rate of profit

Based on

Malthus on population

Smith on Labour theory value

Turgot on land rent - a residual marginal product

rent is determined by wages

labour theory of value - average socially necessary labour time

surplus value

falling rate of profit

goods / machines (embodied labour = c) / labour power (living labour)

surplus value arises

value paid to worker < value added

can buy labour power

exploitation = appropriation of surplus value (rate of exploitation = living labour unpaid = s / living labour paid = v)

competition and the rate of profit

rate of profit (r) = s / (c+v)

intensity of mechanisation (k) = c / (c+v)

average cost per chair = (c+v) / q

more wealth at more affordable prices

capitalist competition is inherently contradictory

Labour and land combine to generate output

The law of diminishing average product of labour

As more labour is used in a given production process, the average product of labour typically falls

Population expand if living standards increase

Malthusian trap - self correcting mechanism (back to subsistence)

Leon Walras

Alfred Marshall

Stanley Jevons

Labour theory of value: the value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not on the greater or less compensation which is paid for that labour