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Because using efficiently does not mean that all labor is used (this holds also for any other factor of production). This is so because on the margin at some point additional inputs might not produce enough value to justify the cost. Consider simple supply and demand on perfectly competitive labor market with no market failures and all standard background ...


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$W(4) = \max\left\{4+bW(4),\frac{1}{2}\left(4 - k + bW(4)\right) + \frac{1}{2}\left(16 - k + bW(16)\right)\right\}$ $W(16) = \max\left\{16+bW(16),\frac{1}{2}\left(4 - k + bW(4)\right) + \frac{1}{2}\left(16 - k + bW(16)\right)\right\} = 16+bW(16)$ First solve for $W(16)$ to get $W(16) = \frac{16}{1-b}$. Then substitute it in $W(4)$ to solve for $W(4)$ as a ...


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The seller's idea is different from the buyer's. The seller wants to make money, so the seller can't ignore the cost. The buyer does not know the cost of shoes, so the evaluation may not be accurate, and the seller will use various means (such as advertising, preferential, packaging, etc.) to interfere with the buyer's judgment, making its evaluation higher ...


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The value is subjective. If the buyer values the shoes at 10 yuan and the seller values 10 yuan at 10 yuan then from economic perspective equal amount of value was exchanged (i.e 10 value of yuan embedded in paper notes for 10 value of yuan embedded in shoes) regardless of what were the costs of production costs. Also money just serves to solve double ...


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The word "noise" implies that there is error in the measurement of household debt, but there is no good reason to believe this is so. In fact, I argue that a finer time period would give you more detail, and a more accurate measurement of the correlation between two variables. You don't want to find a moving average because that throws away valuable ...


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