I’m wondering about the diagram on p. 3 of Hahn’s Common Sense Economics…
I think I understand what the graph is saying, but according to the value scale, the worker would be willing to work a total of 5 hours for 30 apples–2+4+6+8+10. Since nature yields 10 apples per hour, wouldn’t he just stop at three hours and call it good having the 30 apples and use the other two hours for something else?
http://mises.org/books/common_sense_economics_hahn.pdf
I also thought since the curve goes vertical at 8 and 72 total apples, he might actually be willing to work 7 hr. 12 min. for 72 apples, then quit.
You raise a really good question. You might just ask, if he’s willing to work a full hour for just 2 apples, why wouldn’t he just work 12 minutes and quit? And the answer is, he very well might. The point of the graph is to illustrate the points Hahn outlines on page 5…most importantly the first one:
(1) Production never expands beyond the point where the worker demands more for his work-hour than he produces during this work-hour. Any expansion of production depends upon the worker not demanding more in payment than he produces.
So yes, the man may actually stop at any time under 5 hours depending on his preference at the time. But the point is, unless nature starts allowing for more than 10 apples in an hour, the man will never work more than 5 hours.
My second question though is, isn’t this based on sort of an arbtrary consideration of the unit of time, i.e. an hour? Couldn’t he be considering a larger chunk of time (8 hrs. say) with a completely different conclusion reached? The curve goes vertical at 8 hours and 72 total apples (nature yields 80 apples in 8 hrs.), might he actually be willing to work 7 hr. 12 min. for 72 apples, then quit? Or work the whole 8 hrs. and reap a surplus of 8 apples?
(1) Production never expands beyond the point where the worker demands more for his work-hour than he produces during this work-hour. Any expansion of production depends upon the worker not demanding more in payment than he produces.
Perhaps the above should read:
(1) Production never expands beyond the point where the worker demands more for his [considered work period] than he produces during this [considered work period]. Any expansion of production depends upon the worker not demanding more in payment than he produces.
Medwick, the purpose of the graph is to illustrate the point, not represent some reality.
I understand that it’s meant to illustrate…it’s an abstraction. Would you disagree with my modification below?
(1) Production never expands beyond the point where the worker demands more for his [considered work period] than he produces during this [considered work period]. Any expansion of production depends upon the worker not demanding more in payment than he produces.
I think I could agree that would be a more accurate wording.