University of Wisconsin–Madison

Building Process into Short Assignments in Economics

Professor J.R. Walker, Economics 450

Economics 450: Wages and the Labor Market

Writing Assignment #2

In 300 words or less, please answer the following question:

Under what conditions does technological change reduce the demand for labor?

Instructions:

Assume that technological change reduces the relative price of capital (i.e., new machines can produce more output for a given amount of labor). Please explicitly state your assumptions.

In the upper right hand corner of the first page please report the number of words in your answer. Answers with more than 300 words will receive reduced credit. Answers not reporting a word count will not be accepted.

Two copies of your answer (typed) are due at the beginning of class, Tuesday, October 2nd. Also please submit in a business envelope (or other secure device) all drafts and notes made while working on this assignment (may be handwritten). These materials will not be graded, but will help me in following your line of thought. I will return a copy of your answer and the supplementary materials to you. I will keep the other copy for my files.

Hints:

  1. I strongly encourage you to read pages 216–218, “Empirical Evidence: Productivity Growth and Employment in Agriculture and Telephone Communication,” of the course textbook.
  2. One draft is two drafts too few for me.