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A Stern Reminder On The Nature Of Derived Demand, Cat Video Edition…

June 6th, 2013 · No Comments
Econ 101 · Markets

Most introductory economics textbooks point out that the demand for labor is a “derived demand,” meaning that the demand for labor is derived from the demand for the products that the workers make. This makes sense, since there is no reason to hire workers if no one wants to buy your product, and vice versa. This concept goes a long way to explain how we get job postings like this:

Since, given that you are reading this, you spend time on the Internet, you should be well aware of the virtually unlimited demand for cat videos, and, by extension, cat video technologists. Silly as it may be, this is actually a decent example of capitalism in action- resources are being directed to their highest-value use, though likely much to the chagrin of those with fancy (Cat Fancy?) film degrees. I suppose it’s also an example of what some view as the downside of capitalism, namely that people get what they demand in the market, even if what they demand is cat videos.

In any case, I am adding this into my micro lecture slides as we speak.

(Sidenote: Interestingly enough, this is not the first time I’ve written about cat videos.)

Update: I have yet to upgrade to cat videos, so I’m still just on the level of cat photography. Apparently this one is a nonbeliever.

Tags: Econ 101 · Markets

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