Lecture 18

Lecture 18 - Chapter 17: Markets for factors of production...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Exam Wednesday, Feb 27 • Will cover chapters 14, 15, 16 only • Identical format as first exam • Practice exam reviewed in discussion sections Feb 20-26 • Extra office hours Tuesday Feb 26 1:30- 2:30 in Sequoyah 231 Chapter 17: Markets for factors of production Definition: factors of production are the inputs that a productive enterprise requires in order to produce its output Factors of production • labor (people) • capital (equipment, buildings, tools) • natural resources (land, raw materials) • entrepreneur with technology to bring them together Chapter 17: Markets for factors of production A. Demand for labor Chapter 17: Markets for factors of production A. Demand for labor Joe’s Muffler Shop
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2 Inputs: • capital (building, tools) • labor • intermediate goods and services (mufflers, utilities) Output: • number of mufflers replaced • Joe’s shop nets: $100 for each muffler replaced • Question: take building, tools, and utilities fixed, vary labor 9 3 8 2 5 1 Output (mufflers per day) Number of workers Definitions: The marginal product of labor is how much output would increase from hiring one more worker The marginal revenue product is how much revenue would increase from hiring one more worker 9 3 8 2 5 1 Output (mufflers per day) Number of workers 9 3 8 2 5 1 Marginal product (mufflers per worker) Output (mufflers per day) Number of workers
Background image of page 2
3 9 3 8 2 5 5 1 Marginal product (mufflers per worker) Output (mufflers per day) Number of workers 1 9 3 3 8 2 5 5 1 Marginal product (mufflers per worker) Output (mufflers per day) Number of workers 1 9 3 3
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 7

Lecture 18 - Chapter 17: Markets for factors of production...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online