Assume that the necessary labour time to produce good X is 7 hours and good Y is 5 hours. Use the labour theory of value proposed by Adam Smith to answer the following questions with steps of calculation: a. In an early and rude state, calculate the labour costs and labour commanded of good X and good Y, and their relative prices. p. In an advanced economy, the wage costsare only 0.6 of the final prices. How would the answers in (a) be changed? c. If wage is 0.6 of the final price of good X and is 0.8 of good Y, how would the answers in (b) be changed?

Assume that the necessary labour time to produce good X is 7 hours and good Y is 5 hours. Use the labour theory of value proposed by Adam Smith to answer the following questions with steps of calculation: a. In an early and rude state, calculate the labour costs and labour commanded of good X and good Y, and their relative prices. p. In an advanced economy, the wage costsare only 0.6 of the final prices. How would the answers in (a) be changed? c. If wage is 0.6 of the final price of good X and is 0.8 of good Y, how would the answers in (b) be changed?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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