Week 3:
Forum Question 1 Why do some workers make more money than others? Must everyone make the same wage? Explain your answers using labor market equilibrium. Your answer should be 200 to 300 words.
Some workers make more money than others for various reasons, such as the type of work being preformed, the required skill-set for the work, training, experience, quality of work, etc. A workers wages are only justifiable if the value of the work they are required to do equals the wage. No one would argue that a cook at a fast-food restaurant should have the same wages as a neurosurgeon; the two jobs are entirely different and require completely different skill sets, education, training, and knowledge. Therefore, not everyone should make the same wage, even workers in the same position should not be paid the same wage, and the workers wage should be determinate upon their productivity, knowledge, and experience. The labor market is only in equilibrium when each company has purchased enough labor that is profitable at the equilibrium wage. The equilibrium wage is the wage rate that produces neither an excess supply of workers nor an excess demand for workers and labor market. A firm must determine how many workers are needed to keep the employment cost justifiable to ensure profitability of the company. Firms cannot allow wages to become a burden on the company; consequently, if the demand for the good or service that the worker is producing decreases the equilibrium is off and must be correct, typically through a reduction in wages or workforce.
Forum Question 2 Imagine that you are a business owner. Choose whether to hire a new person in the marketing department or upgrade your computer system. Each choice requires the same amount of investment. Address the following topics: What factors do you use to determine whether to invest in the additional capital