1 / 18

Topic 2. Chapters 3 & 4

Topic 2. Chapters 3 & 4. The Demand for Labor. A Competitive Firm’s Demand for Labor in the Short Run. In the short run, a firm demand workers where MRP L (marginal revenue product) = w (money wage) MP L (marginal product) x P (price of output) = w MP L = w/P (real wage)

caraf
Télécharger la présentation

Topic 2. Chapters 3 & 4

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Topic 2. Chapters 3 & 4 The Demand for Labor

  2. A Competitive Firm’s Demand for Labor in the Short Run In the short run, a firm demand workers where MRPL (marginal revenue product) = w (money wage) MPL (marginal product) x P (price of output) = w MPL = w/P (real wage) in a competitive market.

  3. Example Supervisors Output (Q) MPL MRPL (P =$.50) w/P 0 1,000 --- --- ---- 1 4,800 2 8,000 3 9,500 4 10,200 5 10,600

  4. Example Supervisors Output (Q) MPL MRPL (P =$.50) w/P 0 1,000 --- --- ---- 1 4,800 3,800 1,900 2 8,000 3,200 1,600 3 9,500 1,500 750 4 10,200 700 350 5 10,600 400 200

  5. Table 3.2: Hypothetical Schedule of Marginal Revenue Productivity of Labor for Store Detectives

  6. Figure 3.2: Demand for Labor in the Short Run (Money Wages)

  7. Figure 3.1: Demand for Labor in the Short Run (Real Wage)

  8. Figure 3.3: Effect of Increase in the Price of One Input (k) on Demand for Another Input (j), where Inputs Are Substitutes in Production

  9. A Competitive Firm’s Labor Demand in the Long Run In the long run, a firm demand workers where MPL / MPK = w/r where w is wage and r is interest rate (price of capital) *Why? MPL x P = w (A) MPK x P = r (B)  (A)/(B) MPL / MPK = w/r

  10. Figure 3A.1: A Production Function

  11. Figure 3A.3: Cost Minimization in the Production of Q* (Wage = $10 per Hour; Price of a Unit of Capital = $20)

  12. Figure 3A.4: Cost Minimization in the Production of Q* (Wage = $20 per Hour; Price of a Unit of Capital = $20)

  13. Figure 3.4: The Market Demand Curve and Effects of an Employer-Financed Payroll Tax

  14. Figure 4.1: Relative Demand Elasticities

  15. Figure 4.2: Different Elasticities along a Demand Curve

  16. Figure 4.3: Federal Minimum Wage Relative to Wages in Manufacturing, 1938-2007

  17. Figure 4.4: Minimum Wage Effects: Growing Demand Obscures Job Loss

  18. Figure 4.5: Minimum Wage Effects: Incomplete Coverage Causes Employment Shifts

More Related