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L2 Economic Surplus

# L2 Economic Surplus - Office hours James Hamilton Jennifer...

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1 M 11-1 Sequoyah 234 Cynthia Wu Tu 9-11 Sequoyah 238 Jaime Thomas M 1-2, W 3-4 Sequoyah 207 Aaron Schroeder W 12-2 Sequoyah 139 Michael Miyake F 10-12 Sequoyah 139 Paul Lombardi M 2-4 Sequoyah 139 Jennifer Chen Tu 1:30-2:30, Th 10-11 Econ 307 James Hamilton Office hours Chapter 7: Efficiency and Exchange A. Producer surplus Employment opportunity: landscape services 5 hours per week cash pay, no benefits 35 \$10 72 \$12 7 \$8 0 \$1 Number of workers Hourly wage Supply of labor curve (\$2) \$0 \$2 \$4 \$6 \$8 \$10 \$12 \$14 -20 0 20 40 60 80 Number of workers Wage (\$ per hour) Supply of labor curve: to hire a given number of workers (represented by a point on horizontal axis) we would have to pay a certain wage (represented by a point on vertical axis)

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2 Height = opportunity cost for that potential worker If you would be willing to work for \$8 and we pay you \$10, then your surplus as a producer is \$2 Supply of labor curve \$0 \$2 \$4 \$6 \$8 \$10 \$12 \$14 0 100 200 300 400 Number of workers Wage (\$ per hour) Supply of labor curve \$0 \$2 \$4 \$6 \$8 \$10 \$12 \$14 0 100 200 300 400 Number of workers Wage (\$ per hour) Surplus of 100 th
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