Question 1

Discuss the ways in which labor is unlike other commodities bought and sold in the market.
-Why do workers struggle to raise wages and other employee compensation? According to the labor theory of value, what are they bargaining over?

Accepted Answer

The answer of Discuss the ways in which labor is...

Question 2

Discuss the ways in which labor is unlike other commodities bought and sold in the market.
-What are some of the ways that the conflict between employers and employees over surplus product is manifested?

Accepted Answer

The answer of Discuss the ways in which labor is...

Question 3

Explain how the labor theory of value has been criticized and defended and how some reject it and use other theories to explain exploitation.
-What is the transformation problem?

Accepted Answer

The answer of Explain how the labor theory of value...

Question 4

Explain how the labor theory of value has been criticized and defended and how some reject it and use other theories to explain exploitation.
-Explain why the rate of profit and the rate of exploitation are considered to be inconsistent by some economists. As part of your explanation, define the rate of profit and the rate of exploitation.

Accepted Answer

The answer of Explain how the labor theory of value...

Question 5

Explain how the labor theory of value has been criticized and defended and how some reject it and use other theories to explain exploitation.
-What is an alternative theory, besides the labor theory of value and the neoclassical model, used in attempting to explain exploitation?

Accepted Answer

The answer of Explain how the labor theory of value...

Question 6

In early economies, goods were often exchanged through a barter system. What is a barter system?
A) prices are agreed after bargaining or negotiation between buyer and seller.
B) goods are exchanged through a central clearing house called a "barter."
C) goods are exchanged for goods without the use of money.
D) goods are exchanged at fixed prices set by the government.

Accepted Answer

A barter system is a method of exchange where goods are directly exchanged for other goods or services without the use of money. For example, a farmer might exchange a cow for clothing from a textile maker, rather than selling the cow for money and then using that money to buy clothing. The two parties agree on the relative value of the goods being traded and exchange them accordingly.

Question 7

Assume that two goods exchange according to the average amount of labor that goes into producing each of them. If it takes 2 hours to produce a pie and 1 hour to produce a cake, then if Sam has 1 pie to sell
A) he could exchange his pie for 2 cakes
B) he could exchange is pie for ½ of a cake
C) he could exchange his pie for 1 cake.
D) he could exchange his pie for 2 other pies.

Accepted Answer

Given the labor theory of value, a pie, requiring 2 hours of labor, would exchange for 2 cakes if each cake requires 1 hour of labor.

Question 8

Assume that two goods exchange according to the average amount of labor that goes into producing each of them. If it takes 2 hours to produce a pie and 1 hour to produce a cake, then if Sam has 1 cake to sell
A) he could exchange his cake for 2 pies
B) he could exchange is cake for ½ of a pie
C) he could exchange his cake for 1 pie.
D) he could exchange his cake for 2 other cakes.

Accepted Answer

Given the labor theory of value, the exchange rate between goods is based on the amount of labor required to produce them. Since a pie requires 2 hours of labor and a cake requires 1 hour, a cake would exchange for half a pie because it takes half the labor to produce a cake compared to a pie.

Question 9

Suppose a pig farmer spends $20 per day on feed, equipment and buildings for each worker. He pays his workers $40 per day. He sells the pigs for $ 100.
A) the pig farmer is making a profit of $20 per worker.
B) the pig farmer is making a profit of $40 per worker.
C) the pig farmer is making a profit of $60 per worker.
D) the pig farmer is not making a profit.

Accepted Answer

The answer of Suppose a pig farmer spends $20 per...

Question 10

The most important factor determining division of the product between wages and profits is
A) the level of technology.
B) the amount of labor required to produce the product.
C) the bargaining power between employees and employers.
D) federal minimum wages.

Accepted Answer

The bargaining power between employees and employers is the most important factor in determining the division of the product between wages and profits. The amount of labor required and level of technology can also influence the division, but ultimately it is the negotiating power of each side that determines how the profits are allocated. Federal minimum wages can set a floor for wages but do not necessarily determine the final outcome.

Question 11

The term, "relative value," means
A) the price of one good in terms of money.
B) the price of one good in terms of another good.
C) the price of one good exchanged within an extended family.
D) the price of one good today compared to its price at some point in the past.

Accepted Answer

Relative value refers to the value of one good in relation to another good. It is typically expressed as a ratio or comparison of prices. For example, if the relative value of apples to oranges is 2:1, it means that apples are priced twice as high as oranges.

Question 12

The term, "labor power," means
A) a device powered by human effort rather than by electric power.
B) an employee's ability to work for a definite period of time.
C) labor productivity.
D) the relative bargaining power of workers versus employers.

Accepted Answer

Labor power refers to an employee's ability to work for a defined period of time. It is the capacity of a worker to produce labor and generate value for an employer, and is thus an essential component of productive work.

Question 13

According to progressives, labor power is different from other commodities because
A) it is not produced by the capitalist firm.
B) it is sold by the capitalist firm.
C) it is bought and sold in a market.
D) its value does not depend on the relationship between buyer and seller.

Accepted Answer

Progressives believe that labor power is not like other commodities because it is not produced by the capitalist firm. Rather, it is produced by workers themselves, who then sell their labor power to capitalists in a market. This leads to a power imbalance, as the workers are forced to sell their labor power in order to survive, while the capitalists can choose to buy it or not. Additionally, the value of labor power depends on the social context and the costs of reproduction, rather than simply on the relationship between buyer and seller.

Question 14

What is the transformation problem?
A) How can the rate of exploitation determine employee compensation.
B) How can labor hours be transformed into money prices.
C) How can feudalism be transformed into capitalism.
D) How can necessary labor be transformed into surplus labor.

Accepted Answer

The transformation problem is concerned with the question of how labor hours can be transformed into money prices within a capitalist economic system. This was a major theoretical challenge for classical economists such as Karl Marx, who sought to understand the relationship between the value of goods and services and the amount of labor required to produce them. The transformation problem is still a topic of debate within Marxist and economic theory today.

Question 15

What is the rate of exploitation?
A) the ratio of surplus labor to total profit.
B) the ratio of surplus labor to necessary labor.
C) the ratio of surplus labor to exploited labor.
D) the ratio of surplus labor to cost of materials.

Accepted Answer

The rate of exploitation is defined as the ratio of surplus labor to necessary labor. This means that it measures the proportion of a worker's labor that is unpaid and captured by the capitalist as profit. Therefore, the best choice is B, as it correctly defines the rate of exploitation.

Question 16

What is the definition of the rate of profit used in this chapter?
A) the profit divided by the cost of necessary labor.
B) the profit divided by surplus labor.
C) the profit divided by the costs per worker.
D) the price minus the cost of labor inputs.

Accepted Answer

The rate of profit is typically defined as the profit divided by the costs per worker, reflecting the return on investment relative to labor costs.

Quiz 20: Prices, Profits, and Exploitation

Discuss the ways in which labor is unlike other commodities bought and sold in the market. -Why do workers struggle to raise wages and other employee compensation? According to the labor theory of value, what are they bargaining over?

Discuss the ways in which labor is unlike other commodities bought and sold in the market. -What are some of the ways that the conflict between employers and employees over surplus product is manifested?

Explain how the labor theory of value has been criticized and defended and how some reject it and use other theories to explain exploitation. -What is the transformation problem?

Explain how the labor theory of value has been criticized and defended and how some reject it and use other theories to explain exploitation. -What is an alternative theory, besides the labor theory of value and the neoclassical model, used in attempting to explain exploitation?

In early economies, goods were often exchanged through a barter system. What is a barter system?

Assume that two goods exchange according to the average amount of labor that goes into producing each of them. If it takes 2 hours to produce a pie and 1 hour to produce a cake, then if Sam has 1 pie to sell

Assume that two goods exchange according to the average amount of labor that goes into producing each of them. If it takes 2 hours to produce a pie and 1 hour to produce a cake, then if Sam has 1 cake to sell

Suppose a pig farmer spends $20 per day on feed, equipment and buildings for each worker. He pays his workers $40 per day. He sells the pigs for $ 100.

The most important factor determining division of the product between wages and profits is

The term, "relative value," means

The term, "labor power," means

According to progressives, labor power is different from other commodities because

What is the transformation problem?

What is the rate of exploitation?

What is the definition of the rate of profit used in this chapter?