UNIT 18: The Markets for the Factors of Production
(Thị trường cho các yếu tố sản xuất)
Factors of production (inputs)
Land(nguyên liệu)
Capital: (the equipment and structures - văn phòng, nhà xưởng)
Labor
Prices and quantities of these inputs are determined by supply & demand in factor markets.
Derived Demand (Cầu dẫn xuất)
if firms provide more out put↑ → hire more input labor↑
=> The buying and selling market must be good to reduce unemployment
2 Assumptions(giả định)
all markets are competitive.
Firms is a price taker(ng chấp nhận giá)
price of product in market
price hire labor in market
only 1 fixed price in the market
firms care only about maximizing profits.
TPmax(profit) = TRmax - TCmin
Example: Farmer Jack
Cost of hiring worker: wage – the price of labor
hire more worker↑ => quantity wheat↑ => revenue↑ ✅
at one point, hire more worker↑ => quantity wheat↓ ❌
Marginal Product of Labor (MPL)
Ox: Number of labor
Oy: Quantily
MPL = ΔQ/ΔL
Value of the Marginal Product
convert MPL to dollars
VMPL (value of the marginal product of labor) = P x MPL
W(wage) = VMPL = P x MPL
The VMPL curve
Ox: munber of labor
Oy: VMPL
always \
VMPL and Labor Demand
To maximize profits, hire workers where VMPL (lợi ích) = W (chi phí)
VMPL = DL (DEMAND LABOR) đường câu bằng lao động
-increase in selling price, increase in marginal product => increase in vmpl
\ ↑
things that Shift the Labor Demand Curve \ ↑
Changes in the output price, P
Technological change (affects MPL)
supply of other factors (affects MPL)
The Connection Between Input Demand & Output Supply
Input Demand: MC = W / MPL
L↑ => MPL↓ => MC↑
P = W/MPL =MC
Rule Output Supply: P = MC
Labor Supply
The opportunity cost(chi phí cơ hội) of leisure is the wage.
The Labor Supply Curve
/
Oy: L
Ox: W
Things that Shift
labor-leisure trade-off
Opportunities for workers in other markets
Immigration (di cư)
Equilibrium in the Labor Market
Demand: \
supply: /
Ox: L
Oy: W
The wage adjusts(điều chỉnh) to balance supply and demand for labor.
W = VMPL
above Equilibrium
=> surplus(dư) supply labor
Under Equilibrium
=> surplus (dư) demand labor
nghỉ bớt => đg S sang trái, D k đổi => E dịch lên
cầu ở sp giảm => thuê ít lao động => D xuống, S k đổi => E dịch xuống
tăng năng suất => D lên, S k đổi => E lên