Saving “the Market” out of Cambridge: “Backward-bending Labor Supply”

 

Q1. How likely is your taste for “Hersey Kiss ball” to increase as you take more?

Q2. How consistent would your taste for “Irish potatoes” be time after time?

Q3. How often would you measure the value of a product in terms of “the Irish meat”?

Q4. How ready are you to work for longer hours at a lower wage?

Q5. How often do you take a piece of cake and a nap at the same time?

 

My guesses might be as good as the guesses of you who are not established economists such as Paul Samuelson, William Nordhaus, Gregory Mankiw, Paul Krugman…. and Robin Wells

 

Let’s check out some realities.

No.1. “The product” is supposed to be unique and independent from all the other goods and services. The market denies taking any substitutive product out of indefinitely many into consideration. The product is fixed in the first place. Don’t when in the market even think about a single substitute across products.

No.2. “The market” is conceived only for the defined time period. The accounting period is fixed in the first time. Do not cross over periods, s'il vous plaits.

No.3. In the same period of time, each and every one’s demand schedule for anything whatsoever slopes downward. We live in Here on earth ex ante into Eternity.

No.4. The European euro is the legal unit of account always and everywhere even in Ireland. Never take meat, Irish or otherwise, as the value metric.

No.5. In the same period, the marginal cost of working is always and everywhere increasing as we work longer hours. No bending the supply curve backward, please.

No.6. Exogenous to Cambridge, “leisure” is the best form of “consumption.” Goods on one hand and services on the other hand are competitive or “substitutive.” Please do not discriminate for leisure, either, by singling it out as the opportunity cost of monetary income.  

Plus. A parameter may make a “discrete shift” but is never supposed to “continuously vary.”  Discreteness makes stairways and continuity a slope; there is a difference in the order of magnitude between an exogenous parameter and an endogenous variable (to this later).

 

In fine, there must be an order-of-magnitude difference in comprehension of “the market” between them and us. Consequentially, we are surely to come across such “weird” things as the “backward bending” demand for a Giffen good and the “backward bending” supply of their labor in their Principles of Economic. And that time after time, across and over.

             Viva los Doblados!