Which is more accurate for determing wages?

Economics Economics Questions
1

a worker’s marginal revenue product ( ie: MRP(of worker X) = TRP (of workers X)-TRP (of workers Y) or supply and demand?

or are the two inherently linked? For example, if you contribute more to the company, you get paid more–in most instances, this involves more skills or a specific talent–I take it in most cases this means it’s linked with supply and demand, given high-skill/high-talent workers are far rarer than low-skill/common-talent workers?

2

Read MES

3

that’s…totally helpful, especially considering I have no idea what you’re really talking about–I assume a book, but that’s not even clear.

4

Man, Economy, and State by Murray Rothbard.

5

Neither of them, the answer is:

AlogPt = a,+AlogWt+~,t
AlogWt = a,+AlogPt-I -Pw+~t

AlogWt = a,+AlogPt-I -Pw+~t= a,+AlogWt+~,t
AlogWt = a,+AlogPt-I -Pw+~tAlogPt = a,+AlogWt+~,t
AlogWt = a,+AlogPt-I -Pw+~t

6

There’s no real theoretical difference. Of course, once you throw in asymmetric information, government interventionism, and endogenous price rigidities, then one shouldn’t expect the MPL to equal real wages (though wages will always trend towards the MPL because of competition; supply and demand). The value of anything (commodities, capital, labor, services, money, et al.) can only be expressed through competition and is represented by the price mechanism.

It’s important to keep in mind this axiom from Bohm-Bawerk: more profit is preferred to less, and some profit is preferred to none at all. A productive worker is profitable, and competition will elevate his remuneration towards his marginal product.

7

thank you for actually addressing my question–this is pretty much what I suspected, but I wasn’t 100% positive; thanks for confiriming it!