Saturday, October 11, 2003

"Economics101b: Fall 2003: Problem Set 2 Due at start of section on September 9. 1. Consider an economy with the production function: (Y/L) = (K/L)a(E)1-a a. Suppose a = 1/3, E=1, L=100, and K=64; what is output per worker Y/L? b. Suppose a = 1/3, E=3, L=196, and K=49; what is output per worker Y/L? c. If both capital K and labor L double, what happens to total output Y? (Not output per worker Y/L, but total output.) d. Holding E=1, suppose that capital per worker increases from 2 to 4 and then from 4 to 6. What happens to output per worker? 2. Would the balanced-growth path of output per worker be shifted upward, shifted downward, or remain the same if capital were to become more durable--if the rate of depreciation on capital were to fall? 3. Consider an economy in which the depreciation rate is 3% per year, the rate of population increase is 2% per year, the rate of technological progress is 1% per year, and the private savings rate is 19% of GDP. Suppose that the government increases its budget deficit--which had been at 1% of GDP for a long time--to 4% of GDP and keeps..." Brad Delong.

It may seem odd but I can't read things like this without feeling a certain despair. The words describe a philosophy of relative value. I've spent the last half hour trying to find a comment I made recently to the effect that individualism as an ideology is destructive to individuality as lived experience; that freedom is destructive to the notion of choice. Anyway, I can't find it, and I'm almost out of time, but the exercises described above make me want to act in an even less predictably 'economic' way than I do already. I want my individuality back [sic].

Remember I'm a construction worker:
Sheetrock is the modern replacement for plaster applied over wood or metal lath. It's economical to use, and in relative terms the two are identical: they serve the same purpose. But sheetrock is cheap and flimsy. It sucks. It's the 'Big Mac' of building materials. And it is ubiquitous.
I gotta go, but part II of this if I get around to it- and the timing is perfect- is to discuss an acceptance of cultural givens and values and truths, including my defense of plaster and brick, or stone or craft itself, as representing 'absolute' values. "Absolute Value? You mean like the Pope?"

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It's sloppy but it's a start.


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