Labor(post-Plague) B. Wages for the workers would increase due to the decrease in labor pools caused by death. C. The surviving workers benefited from this disaster due to the increase in wages available due to the untimely death of so many. The wealthy landowners would have been overall harmed by the loss in manual labor, which caused less productivity and yet higher wages could be demanded by the surviving workers out of necessity for needed labor, while the rental(capital) rate of the land decreased according to the isoquant.4. The differences in the policy recommendations between these two groups of Economic advisors would greatly differ. The group who believes in coordination failures as a main cause of business cycles would probably apply the "Pareto Prin- cipal" in which 80% of the problem comes from 20% of the causes(the consumers, and their fear of spending that lead to a recession in this scenario). I think that the coordination failure advisors would implement a policy akin to "trickle-down" economics or "Reaganomics" in an effort to encourage spending and investing by consumers by allowing tax breaks and "priming the pump", thus spurring the consumers to spend, causing the aggregate demand to rise, businesses would begin to invest again, and hopefully ends the recession. I think that the Pareto improvement that they would try to sustain would be to avoid recession by this encouraged spending by consumers and solving the problem at the lowest possible echelon. On the other hand, the advisor group that thought that the main causes of business cycles were Technology Shocks do not have a short-run solution to defeat a r...
