Fallacy of Composition: Cobb-Douglas Function
Particularly celebrated as a production function is the caption. To Begin. There in the market as of economics are two hands, supply and demand; the former represents the household while the latter the firm. In macroeconomics , however, the aggregate households are the aggregate firms. Therefore, the aggregate income earners are the aggregate income payers. In other words, each of us is and all of us are the earner on one hand and the payer on the other hand, no questions allowed. There in the economy are no such things as labor incomes vs capital incomes. It’s the gross national income, stupid! In the first place, each of us and all of us are us in commonwealth. In the second place, we wear a hat each, subject to varying colors across (L -3 ); namely, consumer, producer, demander-cum-buyer, supplier-cum-seller, employee-cum-income earner, employer-cum-income payer, saver, investor, labo...