Im trying to get through some economics questions so im prepared for
my test. The questions posted are the ones I have been having some
trouble with. Please draw any needed graphs electronically and post
them to my ftp site: ftp://help.linked2.net username: help@linked2net
password:help.

QUESTION:
Graphically and verbally explain how much a worker gets paid.  What
can a worker do to make a higher wage.

Several factors determine how much money a worker earns.  First,
compensating wage differentials exist.  "...[T]hey serve to compensate
for the relative attractiveness, or nonmonetary differences, among
jobs...," (page 237).  Workers who work late night shifts typically
make more than those who work day shifts.  People who work holidays
and weekends typically make more than those who do not.  Doctors earn
substantial compensation in part to encourage people to undergo many
years of expensive schooling and training.  In contrast, jobs that are
especially pleasant or psychologically rewarding, such as those of
park rangers and the clergy, tend to have more modest pay levels.

Second, differences in labor quality play a significant role. 
Differences in mental and physical abilities, education and training,
and experience all play a role in how much a person earns.

Third, a lucky few have talents for which labor supply is essentially
inelastic.  Entertainers, sports stars, and musicians who have a
particular skill that is highly valuable can earn astonishing amounts
because the supply of people with those highly desirable abilities is
largely fixed.

Finally, labor markets are largely divided into noncompeting groups. 
This is because it is frequently difficult and costly for a member of
one profession to enter into another.  Especially for professions and
skilled trades, proficiency is frequently time-consuming and expensive
to achieve.  As a result, the wages for one occupation can diverge
substantially from the wages of another.

Fundamentally, a person's wages are determined by the demand for his
or her labor, the supply of his or her type of labor, and his or her
marginal productivity.  These items are reflected graphically in the
file I have uploaded to your FTP site called Economics Question 15.

Sincerely,

Wonko

Reference: Economics, 14th edition, by Samuelson & Nordhaus, McGraw-Hill Inc., 1992

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Clarification of Answer by wonko-ga on 15 May 2004 17:35 PDT

The provided username/password for your FTP site are not being
accepted.  Please verify that they are correct.

Sincerely,

Wonko

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Clarification of Answer by wonko-ga on 15 May 2004 18:31 PDT

I managed to gain access by adding a period after linked2 in the
username.  Now the server reports that the disk is full.  Please check
and advise me what to do.

Thanks!

Wonko

Suppose the owners sell the company to the employees cheap (rare but
it does happen) They likely run it as a cooperative. The cooperative
has a debt of one million dollars, gross sales of elven million
dollars per year. Wages, perks and benefits paid are four million
dollars per year divided among the 100 fulltime employees/owners
including the managers, directors and CEO. That is $40,000 per year
average.
 Where does the other seven million in receipts go? One million for
Social security, workmens comp and insuranse. One million for
electricity and other forms of energy. One million for advertising,
lawyers, consultants, accountants and other sub-contractors who are
not employees. One million for parttime temporary workers who are not
share holders. One million for taxes, fees and fines to the local,
state and federal government. One  million for replacement and repair
and upgrading of machinery, buldings, grounds. One million for raw
material and sub-assemblies for the product. Where does the last
million go? Miscellaneous, royalties, reserves, contigency fund,
interest on debt, distribution to the co-op owners. Almost the
identical distribution occurs in a for profit stock corporation.
Typically there is little freeboard that can be used to give big pay
raises, unless most of the employees work hard and smart. Likely I
missed some big ticket costs of operation.  Neil