Lecture 19

Lecture 19 - Chapter 17: Markets for factors of production...

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1 Exam Wednesday, Feb 27 • Will cover chapters 14, 15, 16 only • Identical format as first exam • Practice exam reviewed in discussion sections today and tomorrow • Extra office hours Tuesday Feb 26 1:30- 2:30 in Sequoyah 231 • No discussion sections Wed-Fri Feb 27-29 Chapter 17: Markets for factors of production A. Demand for labor B. Supply of labor C. Trends in labor markets • Over time, increase in population means more people looking for jobs • Almost every year, the number of people working in America has gone up Number of people working at nonagricultural jobs in U.S. 30 million in 1930 138 million in 2008 wage ($/hour) total number of workers (millions) 90 labor supply in 1980 If labor demand were fixed, that would mean falling wages every year 110 labor supply in 1990 labor supply in 2000 130 labor demand But in fact, real compensation per worker (adjusted for inflation) has increased almost every year
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2 wage (2007$/ hour) total number of workers (millions) 90 labor supply in 1980 Implication: labor demand curve must have also shifted every year by more than labor supply 110 labor supply in 1990 labor supply in 2000 130 labor demand in 1980 $12.60 labor demand in 1990 $13.50 labor demand in 2000 $15.50 In 2007, had 138 million people working earning average compensation around $17.00 per hour What accounts for shift in labor demand? Answer: gains in productivity
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Lecture 19 - Chapter 17: Markets for factors of production...

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