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

2. Factors Market

4. Factors of Production Factors, Resources, Inputs – Land – Labor – Capital – Entrepreneurship

5. 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

6. 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

7. Perfectly Competitive Labor Market

9. Households = Supply Firms = Demand

10. Perfectly Competitive Market and Firm

11. Wage Elasticity- Labor Markets

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

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

15. Monopolist Monopolist and Perfectly Competitive Labor Market

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

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

19. Minimum Wage in PC Labor Market?

20. Minimum Wage with Monopsony in Labor Market?

22. SANTA Ded Moroz Joulupukki Weihnachtsmann Pai Natal Babbo Natale

23. Minimum Wage Monopolist Minimum Wage Monopolist and Perfectly Competitive Labor Market

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

25. Unions in PC Labor Market?

26. Union and Monopolist Union and Monopolist and Perfectly Competitive Labor Market

27. Unions and Monopsonistic Labor Market?

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

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

30. Other Factors Labor = Wage Capital = Interest (that’s it until macro) Land = Rent Entrepreneurship- profit

31. Land

32. 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.

33. 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

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

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

36. From the Homework Petroleum Nuts and bolts Prize Horse

37. From the Homework Professors’ Salary and Marginal Productivity

38. From the Homework University Monopsony? Student Unions?