|
VOTING PARADOX: The observation that voting by a relatively small group of people might generate a intransitive or inconsistent ranking of three or more alternatives, creating a paradox of rankings. The preferences of rational individuals are generally assumed to transitive and consistent, that is, if a person prefers A to B and B to C, then the person also prefers A to C. However, the preferences of group of voters might not be consistent. That is, as a group, voters might prefer A to B and B to C, but then prefer C to A. This is not only paradoxical and confusing, it also can be inefficient.
Visit the GLOSS*arama
|
|

|
|
                           OVEREMPLOYMENT: The condition in which resources are more actively engaged in the production of goods and services than they are willing and able to at current prices. This condition is most important for short-run macroeconomic activity and short-run aggregate market analysis. In particular, overemployment is a key reason for the positive slope of the short-run aggregate supply curve. Overemployment is a primary reason the macroeconomy is able to produce MORE than full-employment production in the short run. The key for overemployment rests with the purchasing power of the wages (and other resource prices) received by labor (and other resource owners). In particular, workers engage in productive activities based on the real, purchasing power of their wages. These real wages are based on nominal wages relative to the price level. Higher real wages entice workers to increase the quantity supplied of their labor. As such, they can be enticed to generate more production.When their employment and resulting production exceed full-employment levels, overemployment results. This can happen for a couple of reasons: - First, workers might be temporarily fooled into thinking the purchasing power of their wages has increased, when in reality it has not. While workers generally have close, personal knowledge of their nominal wages, especially when cashing paychecks, they are likely to have less information about the price level. A boost in nominal wages can temporarily lead them to believe that their real wages have also increased, but only because they do not recognized that the price level has increased. Because they THINK their real wages are greater they increase the quantities of their labor supplied. People work harder when they get paid more. And when they work harder, they produce more.
- Second, the purchasing power of the wages received by workers might actually increase, temporarily. This results because all wages and prices do not increase at the same pace. For example, a higher price level might prompt a few employers to pay their workers higher wages. These workers, as such, receive higher nominal wages NOW. Given that the price level has also increased, the presumption is that real wages received by these workers have not changed. However, the price of the goods and services these workers actually buy might not increase along with the overall price level. The prices that workers pay might increase LATER. Because workers really ARE receiving greater real wages NOW, they increase the quantities of their resources supplied. Once again, people work harder when they get paid more. And when they work harder, they produce more.
In both cases, workers are overemployed. They are actually working harder and producing more than they would at full employment.
 Recommended Citation:OVEREMPLOYMENT, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: July 11, 2025]. Check Out These Related Terms... | | | | | | | Or For A Little Background... | | | | | | | | And For Further Study... | | | | | | | | | | | | | | |
Search Again?
Back to the WEB*pedia
|


|
|
BLUE PLACIDOLA [What's This?]
Today, you are likely to spend a great deal of time browsing about a thrift store trying to buy either a pair of leather sandals that won't cause blisters or clothing for your kitty cats. Be on the lookout for spoiled cheese hiding under your bed hatching conspiracies against humanity. Your Complete Scope
This isn't me! What am I?
|
|
The portrait on the quarter is a more accurate likeness of George Washington than that on the dollar bill.
|
|
"If anything terrifies me, I must try to conquer it. " -- Francis Charles Chichester, yachtsman, aviator
|
|
SPSS Statistical Product and Service Solutions, Statistical Package for the Social Sciences (software)
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|

|