《西方经济学》双语课件PPTch18-The Markets for the Factors of Production
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Farmer Jack maximizes profits by thinking at the margin:
• If the benefit from hiring another worker
exceeds the cost, Jack will hire that worker.
CHAPTER 18 THE MARKETS FOR THE FACTORS OF PRODUCTION
What other factors affect labor supply?
▪ How do various events affect the equilibrium
wage and employment of labor?
▪ How are the equilibrium prices and quantities of
5
Our Example: Farmer Jack
▪ Cost of hiring another worker:
the wage – the price of labor
▪ Benefit of hiring another worker:
Jack can produce more wheat to sell, increasing his revenue.
markets for goods & services, except:
▪ Demand for a factor of production is a derived
demand – derived from a firm’s decision to supply a good in another market.
CHAPTER 18 THE MARKETS FOR THE FACTORS OF PRODUCTION
6
Farmer Jack’s Production Function
L
(no. of workers)
Q
(bushels of wheat per week)
3,000 2,500
Quantity of output
CHAPTER 18 THE MARKETS FOR THE FACTORS OF PRODUCTION
3
Two Assumptions
1. We assume all markets are competitive.
The typical firm is a price taker
• in the market for the product it produces • in the labor market
2. We assume that firms care only about maximizing profits.
• Each firm’s supply of output and demand for
inputs are derived from this goal.
CHAPTER 18 THE MARKETS FOR THE FACTORS OF PRODUCTION
0
0
2,000
1 1000
Hale Waihona Puke Baidu
1,500
2 1800
1,000
3 2400
500
4 2800 5 3000
determined by supply & demand in factor markets.
CHAPTER 18 THE MARKETS FOR THE FACTORS OF PRODUCTION
2
Derived Demand
▪ Markets for the factors of production are like
produce goods and services.
• Labor • Land • Capital: the equipment and structures used
to produce goods and services.
▪ Prices and quantities of these inputs are
other inputs determined?
CHAPTER 18 THE MARKETS FOR THE FACTORS OF PRODUCTION
1
Factors of Production and Factor Markets
▪ Factors of production: the inputs used to
4
Our Example: Farmer Jack
▪ Farmer Jack sells wheat in a perfectly
competitive market.
▪ He hires workers in a perfectly competitive labor
market.
▪ When deciding how many workers to hire,
In this chapter, look for the answers to these questions:
▪ What determines a competitive firm’s demand
for labor?
▪ How does labor supply depend on the wage?
▪ The size of this benefit depends on Jack’s
production function: the relationship between the quantity of inputs used to make a good and the quantity of output of that good.
18 The Markets for the Factors of Production
PRINCIPLES OF
ECONOMICS
FOURTH EDITION
N. G R E G O R Y M A N K I W
PowerPoint® Slides by Ron Cronovich
© 2007 Thomson South-Western, all rights reserved
• If the benefit from hiring another worker
exceeds the cost, Jack will hire that worker.
CHAPTER 18 THE MARKETS FOR THE FACTORS OF PRODUCTION
What other factors affect labor supply?
▪ How do various events affect the equilibrium
wage and employment of labor?
▪ How are the equilibrium prices and quantities of
5
Our Example: Farmer Jack
▪ Cost of hiring another worker:
the wage – the price of labor
▪ Benefit of hiring another worker:
Jack can produce more wheat to sell, increasing his revenue.
markets for goods & services, except:
▪ Demand for a factor of production is a derived
demand – derived from a firm’s decision to supply a good in another market.
CHAPTER 18 THE MARKETS FOR THE FACTORS OF PRODUCTION
6
Farmer Jack’s Production Function
L
(no. of workers)
Q
(bushels of wheat per week)
3,000 2,500
Quantity of output
CHAPTER 18 THE MARKETS FOR THE FACTORS OF PRODUCTION
3
Two Assumptions
1. We assume all markets are competitive.
The typical firm is a price taker
• in the market for the product it produces • in the labor market
2. We assume that firms care only about maximizing profits.
• Each firm’s supply of output and demand for
inputs are derived from this goal.
CHAPTER 18 THE MARKETS FOR THE FACTORS OF PRODUCTION
0
0
2,000
1 1000
Hale Waihona Puke Baidu
1,500
2 1800
1,000
3 2400
500
4 2800 5 3000
determined by supply & demand in factor markets.
CHAPTER 18 THE MARKETS FOR THE FACTORS OF PRODUCTION
2
Derived Demand
▪ Markets for the factors of production are like
produce goods and services.
• Labor • Land • Capital: the equipment and structures used
to produce goods and services.
▪ Prices and quantities of these inputs are
other inputs determined?
CHAPTER 18 THE MARKETS FOR THE FACTORS OF PRODUCTION
1
Factors of Production and Factor Markets
▪ Factors of production: the inputs used to
4
Our Example: Farmer Jack
▪ Farmer Jack sells wheat in a perfectly
competitive market.
▪ He hires workers in a perfectly competitive labor
market.
▪ When deciding how many workers to hire,
In this chapter, look for the answers to these questions:
▪ What determines a competitive firm’s demand
for labor?
▪ How does labor supply depend on the wage?
▪ The size of this benefit depends on Jack’s
production function: the relationship between the quantity of inputs used to make a good and the quantity of output of that good.
18 The Markets for the Factors of Production
PRINCIPLES OF
ECONOMICS
FOURTH EDITION
N. G R E G O R Y M A N K I W
PowerPoint® Slides by Ron Cronovich
© 2007 Thomson South-Western, all rights reserved