After reading Principles of Microeconomics, please discuss the incentives and allocation of labor resources and financial instruments. Try to relate the concepts to your personal life. In considering the allocation of labor and saving resources, please address the questions below:

• What is your incentive to work?
• Would you continue to go to work if you were not being paid?
• Why did the employer hire you?
• Would you save more or spend more if the interest on your bank account increased?

In addition, consider the response of at least two other students. Please keep the reflection questions in mind as you watch the following videos. Please include your insights from the videos in your discussion response.

Reflection questions and their respective video links:

Marginal Product of Labor

https://www.khanacademy.org/economics-finance-domain/microeconomics/firm-economic-profit/labor-marginal-product-rev/v/a-firm-s-marginal-product-revenue-curveLinks to an external site.

Assume ceteris paribus. From the perspective of a competitive firm in the local car wash market, what would likely be the marginal product of a sixth employee?

Hiring decision of the firm

https://www.khanacademy.org/economics-finance-domain/microeconomics/firm-economic-profit/labor-marginal-product-rev/v/how-many-people-to-hire-given-the-mpr-curveLinks to an external site.

Say we change the ceteris paribus assumptionto allow each employee to be more productive. For example, we add a zero-cost management technique that allows for the division of labor based on specialization. As a result, each employee's marginal product increases by one. Should the car wash hire more employees?

Job prospects when more firms are in a market

https://www.khanacademy.org/economics-finance-domain/microeconomics/firm-economic-profit/labor-marginal-product-rev/v/adding-demand-curvesLinks to an external site.

You are looking for work as a car washer. How does the opening of more car washes in your area change your hourly wage prospects?

Consumption and Savings/Investment

https://www.khanacademy.org/economics-finance-domain/macroeconomics/gdp-topic/gdp-components-tutorial/v/investment-and-consumptionLinks to an external site.

In economics, we assert that savings is by definition equal to investment in the aggregate. Consider the purchase of a new Ford F-150 pick-up truck by a local farmer's market merchant. She uses the truck to bring fruits and vegetables from a nearby farm for her stand, but she also uses it as a private vehicle for everyday use. Is the purchase of truck consumption or investment? Explain.

Time value of money

https://www.khanacademy.org/economics-finance-domain/core-finance/interest-tutorial/compound-interest-tutorial/v/introduction-to-compound-interestLinks to an external site.

Would a one percent increase in the interest rate encourage you to consume less of your income today so you can put more of your money into an interest-bearing account (e.g., savings)?

Impact of interest and compounding (three videos with one discussion)

https://www.khanacademy.org/economics-finance-domain/core-finance/interest-tutorial/compound-interest-tutorial/v/the-rule-of-72-for-compound-interestLinks to an external site.

https://www.khanacademy.org/economics-finance-domain/core-finance/interest-tutorial/interest-basics-tutorial/v/introduction-to-interestLinks to an external site.

https://www.khanacademy.org/economics-finance-domain/core-finance/interest-tutorial/interest-basics-tutorial/v/interest-part-2Links to an external site.

If the interest on your savings accountwas compounded more frequently (for example, twice a year as opposed to only once a year), would it make any difference in how much interest you earn?