Unformatted text preview: technological change, and changes in the supply of other factors. 3. Events that could shift the supply of labor include changes in tastes, changes in alternative opportunities, and immigration. 4. The wage can adjust to balance the supply and demand for labor while simultaneously equaling the value of the marginal product of labor. Supply and demand for labor determine the equilibrium wage. Firms maximize profits by choosing the amount of labor where the wage is equal to the value of the marginal product of labor. 5. A large immigration would increase the supply of labor, thus reducing the wage. With more labor working with capital and land, the marginal product of capital and land is higher, so rents earned by owners of land and capital would increase....
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This note was uploaded on 01/16/2012 for the course PSYCH 373 taught by Professor Marthafaircloth during the Spring '09 term at Campbell University .
- Spring '09