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A wage labor household is a special case of a farm house-hold, in which the household produces no food and employs no labor in its own production activities. Defining all notation as in the chapter, do the following: a. Write a simple equation describing the relationship between m and f when a household produces no food. b. Write an equation describing the relationship between n and w when a household employs no labor. c. Demonstrate that the formula for the approximate per-centage increase in a farm household's purchasing power arising out of an increase of p percent in the price of food and εp percent in the wage, p m+εn, has exactly the same implications for the effect of the price and wage changes on a wage labor household's pur- chasing power as the formula for the approximate per- centage reduction in a wage labor household's purchasing power, pf - εw.

A wage labor household is a special case of a farm house-hold, in which the household produces no food and employs no labor in its own production activities. Defining all notation as in the chapter, do the following: a. Write a simple equation describing the relationship between m and f when a household produces no food. b. Write an equation describing the relationship between n and w when a household employs no labor. c. Demonstrate that the formula for the approximate per-centage increase in a farm household's purchasing power arising out of an increase of p percent in the price of food and εp percent in the wage, p m+εn, has exactly the same implications for the effect of the price and wage changes on a wage labor household's pur- chasing power as the formula for the approximate per- centage reduction in a wage labor household's purchasing power, pf - εw.

Understanding Business
Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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A wage labor household is a special case of a farm house-hold, in which the household produces no food and employs no labor in its own production activities. Defining all notation as in the chapter, do the following: a. Write a simple equation describing the relationship between m and f when a household produces no food. b. Write an equation describing the relationship between n and w when a household employs no labor. c. Demonstrate that the formula for the approximate per-centage increase in a farm household's purchasing power arising out of an increase of p percent in the price of food and εp percent in the wage, p m+εn, has exactly the same implications for the effect of the price and wage changes on a wage labor household's pur- chasing power as the formula for the approximate per- centage reduction in a wage labor household's purchasing power, pf - εw.
Transcribed Image Text:A wage labor household is a special case of a farm house-hold, in which the household produces no food and employs no labor in its own production activities. Defining all notation as in the chapter, do the following: a. Write a simple equation describing the relationship between m and f when a household produces no food. b. Write an equation describing the relationship between n and w when a household employs no labor. c. Demonstrate that the formula for the approximate per-centage increase in a farm household's purchasing power arising out of an increase of p percent in the price of food and εp percent in the wage, p m+εn, has exactly the same implications for the effect of the price and wage changes on a wage labor household's pur- chasing power as the formula for the approximate per- centage reduction in a wage labor household's purchasing power, pf - εw.
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