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Agenda Collect HW Review/Overview Unions and Minimum Wage Stocks Research Reporting Former Students HW

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Factors Market

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Factors of Production Factors, Resources, Inputs Land Labor Capital Entrepreneurship

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Cost Minimizing Combination of Resources at a Given Level of Output MPP/$ of Labor = MPP/$ of Capital $ = MRC = Price (in perfectly competitive market) Example MPP last unit of labor = 5Wage rate (MRC)= $10 MPP last unit of capital = 8 MRC = $16 Labor MPP/$ =.5Capital MPP/$ =.5

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Optimal Combination (Profit Maximizing) of Resources at a Given Level of Output MRP/$ of Labor = MRP/$ of Capital $ = MRC = Price (in perfectly competitive market) Example MRP last unit of labor = $10Wage rate (MRC)= $10 MRP last unit of capital = $16 MRC = $16 Labor MRP/$ = Capital MRP/$ = 1

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Perfectly Competitive Labor Market

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Households = Supply Firms = Demand

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Perfectly Competitive Market and Firm

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Wage Elasticity- Labor Markets

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Perfectly Competitive Market and Firm Supply = Marginal Resource Cost (MRC) Demand = Marginal Revenue Product (MRP) Profit-Max Q of Labor: MRP=MRC

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Perfectly Competitive Firm MRP>MRC- hire more MRC>MRP- fire some

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Monopolist Monopolist and Perfectly Competitive Labor Market

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Labor Market Monopsony in Competitive Product Market *one buyer of labor (only one firm hiring)

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Labor Market Monopsony Product Market Monopoly *one buyer of labor (only one firm hiring)

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Minimum Wage in PC Labor Market?

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Minimum Wage with Monopsony in Labor Market?

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SANTA Ded Moroz Joulupukki Weihnachtsmann Pai Natal Babbo Natale

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Minimum Wage Monopolist Minimum Wage Monopolist and Perfectly Competitive Labor Market

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Unions Collective Bargaining _________ of workers Clayton Antirust Act (1914)

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Unions in PC Labor Market?

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Union and Monopolist Union and Monopolist and Perfectly Competitive Labor Market

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Unions and Monopsonistic Labor Market?

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Agenda FRQ return Land and Economic Rent FRQs dos mas De nada

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Unions and Monopsonistic Labor Market Bilateral Monopoly One buyer, One seller Outcome is difficult to predict

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Other Factors Labor = Wage Capital = Interest (thats it until macro) Land = Rent Entrepreneurship- profit

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Land

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Economic Rent Term originally only applied to land Payment for land above price necessary for land to be made available A decrease in the payment for land will not reduce the quantity of land available for rent.

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Economic Rent- modern Payment for any factor above price necessary for that factor to be employed A decrease in the payment for the factor will not reduce the available supply of the factor

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Economic Rent- in other words Payment for/to any factor above the payment required by its owner

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Human Capital Investment to improve skills and productivity of labor Self or Firm High wage jobs OFTEN include large human capital investments

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From the Homework Petroleum Nuts and bolts Prize Horse

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From the Homework Professors Salary and Marginal Productivity

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From the Homework University Monopsony? Student Unions?