Deck 20: Prices, Profits, and Exploitation

Question 1

Whats defention of terms:
-rate of profit

Answer 1

equals the profit divided by the costs to the corporation for a worker and his or her used-up material goods

Question 2

Whats defention of terms:
-surplus

Answer 2

the amount above costs that goes as profit to the owners of industry

Question 3

Whats defention of terms:
-transformation problem

Answer 3

question of how values given in labor hours can be transformed into prices in money terms under capitalism

Question 4

Explain how the relative value of products is determined by the amount of labor in a simple economy.
-What is meant by the term

Question 5

Explain how the relative value of products is determined by the amount of labor in a simple economy.
-Explain how the number of chickens could be the "price" of a pig in the simple economy.

Question 6

Explain how the relative value of products is determined by the amount of labor in a simple economy.
-How does the example in this chapter use the amount of labor used to produce a product to determine the relative value of one product in terms of another product, such as the value of pigs in terms of chickens? What types of labor go into producing the product?

Question 7

Explain how the relative value of products is determined by the amount of labor in a simple economy.
-How does the use of term "surplus" in this chapter differ from its use in chapter 2?

Question 8

Explain how the relative value of products is determined by the amount of labor in a capitalist market economy.
-State the key factors that make the analysis of the labor theory of value more complex in a capitalist market economy. Explain.

Question 9

Explain how the relative value of products is determined by the amount of labor in a capitalist market economy.
-How do prices in an advanced economy help measure the relative value of two different commodities? How are the prices of various goods measured in an advanced market economy?

Question 10

Explain how the relative value of products is determined by the amount of labor in a capitalist market economy.
-Explain how money helps facilitate trade and enables economies to grow.

Question 11

Explain how the relative value of products is determined by the amount of labor in a capitalist market economy.
-How is labor input into a product measured in a capitalist market economy? Explain using an example.

Question 12

Explain how the relative value of products is determined by the amount of labor in a capitalist market economy.
-What does the labor theory of value assume about other inputs such as, in the example of the pigs, feed or machinery? In other words, how is the labor measured for inputs other than employees?

Question 13

Show how employers take part of the employee's product as profit in market capitalism.
-What is necessary labor?

Question 14

Show how employers take part of the employee's product as profit in market capitalism.
-What is the surplus created in the production of a product? Explain how this surplus is created.

Question 15

Show how employers take part of the employee's product as profit in market capitalism.
-How does surplus translate into profits for business owners in a capitalist market economy?

Question 16

Show how employers take part of the employee's product as profit in market capitalism.
-Assume the price of a quart of yogurt is $5 in the market. A firm employs one worker, and she earns $6 an hour for an eight-hour day. Other inputs to produce a quart of yogurt come to $2 per quart. Each day, the firm produces and sells 20 quarts of yogurt. Calculate the surplus value and rate of profit per worker.

Question 17

Discuss the ways in which labor is unlike other commodities bought and sold in the market.
-Use the concept of labor power to explain how working for an employer in a capitalist market economy is not the same as slavery.

Question 18

Discuss the ways in which labor is unlike other commodities bought and sold in the market.
-How can labor power be treated as just another commodity, such as cheese, in the market?

Question 19

Discuss the ways in which labor is unlike other commodities bought and sold in the market.
-What are some criticisms of this idea of labor power as a commodity? How is labor power

Question 20

Discuss the ways in which labor is unlike other commodities bought and sold in the market.
-Why do employers try to keep wages and other employee compensation low? Explain the impact on business owners if the cost of labor rises?

Question 21

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?

Question 22

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?

Question 23

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?

Question 24

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.

Question 25

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?

Question 26

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.

Question 27

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.

Question 28

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.

Question 29

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.

Question 30

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.

Question 31

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.

Question 32

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.

Question 33

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.

Question 34

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.

Question 35

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.

Question 36

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.