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Bruno's Preferences in the Angela-Bruno Model
Angela's Survival Constraint as a Limit on Bruno's Power
In the Angela-Bruno model, the grain Angela receives represents her sole income. Because she will starve if she receives an insufficient amount, her biological need for survival creates a fundamental constraint on the interaction. This constraint limits Bruno's power, even under coercion, because he must provide her with at least a minimum allocation of grain to ensure her survival and continued ability to work. This floor on her well-being is referred to as her survival constraint.
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Determining Bruno's Profit-Maximizing Allocation under Coercion
Angela's Survival Constraint as a Limit on Bruno's Power
Figure 5.3c - Bruno's Preferences for Grain and Angela's Free Time
In a scenario involving a landowner and a farmer, the landowner's well-being is determined solely by the amount of grain they receive. The landowner is unconcerned with the amount of free time the farmer has. If we were to map the landowner's preferences on a graph with the farmer's free time on the horizontal axis and the amount of grain on the vertical axis, which of the following statements would be true regarding the landowner's indifference curves?
Landowner's Preferences and Indifference Curves
Consider a situation with a landowner and a farmer, where the landowner's well-being depends solely on the quantity of grain they receive. Given this, the landowner would prefer an outcome where the farmer works 8 hours a day and the landowner receives 4.5 bushels of grain, over an outcome where the farmer works 12 hours a day and the landowner receives 4 bushels of grain.
Landowner's Preference Evaluation
Consider a model with a farmer and a landowner. The landowner's satisfaction is determined solely by the amount of grain they receive and is unaffected by the farmer's hours of free time. If an allocation where the farmer has 12 hours of free time and the landowner receives 5 bushels of grain represents one point on the landowner's indifference curve, which of the following points would also lie on the same indifference curve?
Evaluating Economic Advice
Match each description of an individual's preferences for two goods (Good X on the horizontal axis and Good Y on the vertical axis) with the corresponding shape of their indifference curves.
Analyzing a Landowner's Preferences
A landowner's well-being depends exclusively on the quantity of grain they receive. They are completely unconcerned with the amount of free time a farmer has or the number of hours the farmer works. Given the four potential outcomes below, which statement accurately analyzes the landowner's preferences regarding these outcomes?
- Outcome A: Farmer has 14 hours of free time, Landowner receives 4 bushels of grain.
- Outcome B: Farmer has 12 hours of free time, Landowner receives 5 bushels of grain.
- Outcome C: Farmer has 10 hours of free time, Landowner receives 5 bushels of grain.
- Outcome D: Farmer has 8 hours of free time, Landowner receives 4.5 bushels of grain.
Consider a landowner whose well-being is determined only by the amount of grain they receive. They are offered two different land-use contracts. Contract X results in the farmer working 10 hours per day and the landowner receiving 5 bushels of grain. Contract Y results in the farmer working 14 hours per day and the landowner also receiving 5 bushels of grain. From the landowner's perspective, Contract Y is preferable to Contract X.
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Determining Bruno's Profit-Maximizing Allocation under Coercion
Bruno's Coercion Model and the Encomienda System
In a scenario where a landowner has absolute power over a worker, the landowner's goal is to maximize their own share of the harvest. The only limit on the landowner is the need to provide the worker with just enough food to ensure their biological survival and ability to work in the future. Suppose a new, more calorie-dense crop is introduced, which means the worker requires a smaller physical quantity of the harvest to meet their survival needs. How does this technological change affect the maximum share of the harvest the landowner can claim?
The Limits of Coercion in Resource Allocation
Limits on Power in a Company Town
Consider a historical economic scenario where a powerful landowner has complete coercive control over a landless farmer, whose only source of sustenance is the portion of the harvest the landowner allocates to them. If the landowner's sole objective is to maximize their own share of the harvest, it is always rational for the landowner to provide the farmer with the absolute minimum quantity of food required for their biological survival, regardless of the total amount the farmer produces.
Productivity, Power, and Survival
In an economic model where a landowner has complete coercive power over a worker, the landowner's primary goal is to maximize the amount of grain they keep. The worker's only source of food is the grain allocated to them by the landowner. If the landowner chooses an allocation that provides the worker with less than the amount needed for biological survival, what is the most likely long-term consequence for the landowner's own outcome?
In an economic model where a powerful landowner controls a worker through coercion, various boundaries and outcomes define the possible allocations of work and harvest. Match each key concept from the model to its correct description.
Calculating the Limit of Coercive Power
In an economic model of a coercive interaction between a landowner and a landless farmer, a graph depicts all possible allocations. The vertical axis measures the farmer's grain consumption, and the horizontal axis measures the farmer's hours of free time. A horizontal line on this graph, labeled the 'biological survival constraint', intersects the vertical axis at a positive value. What does this line represent in the context of the landowner's power?
Evaluating Long-Term Strategies for a Monopolistic Employer