Short Answer Question:   Over the past decade, Japan has faced a...

Short Answer Question:

Over the past decade, Japan has faced a steady drop in the number of working-age people.  Here are three reasons why:

1. Japan's birthrate has dropped to a record low;
2. Japan allows little immigration;
3. Japan's population is aging

Unemployment has been lower in Japan than in other countries.  Because labor is relatively scarce in Japan, it is relatively costly.  To sell products, Japanese retailers rely more on physical capital, particularly vending machines, which obviously eliminate the need for sales clerks. 

We observe that Japan has more vending machines per capita than any other country on the planet—twice as many as the United States and 10 times as many as Europe.  And, not just that.  In Japan, vending machines sell a wider range of products than elsewhere, including beer, sake, whiskey, rice, fresh eggs, beef, vegetables, pizza, entire meals, fried foods, fresh flowers, clothes, toilet paper, fishing supplies including bait, video games, software, ebooks, toys, mobile phone recharging and even X-rated comic books.

Japan's vending machines are also more sophisticated.  Newer models come with video monitors and touch pad screens.  Wireless chips alert vendors when supplies run low.  Vending machines in Japan are less abused, in part because they are more sophisticated and more reliable. 

Forty percent of all soft drink sales in Japan are through vending machines, compared to only 12 percent of U.S. sales.  Japanese sales per machine are double the U.S rate. 

Research shows that most Japanese consumers prefer an anonymous machine to a salesperson. 

This summary indicates that Japanese producers combine resources in a way that conserves the resource that is more costly, in this case, labor. 

For 20 points, please address the following questions, using the economics you have learned so far to substantiate your point(s).

1. Suppose you had the choice of purchasing identically priced lunches from a vending machine or at a cafeteria.  Which would you choose?  Why?
2. What can you say about the Elasticity of Supply of labor in Japan relative to the Elasticity of Supply of labor in the U.S. In your write up, please be sure to define the elasticity of supply and determine why that is at the essence of the push to automation in Japan.
3. What industry-wide automation do you observe happening in the U.S. now if any at all.