Содержание
- 2. How much does the economy produce? The quantity that an economy will produce depends on two
- 3. Factors affecting productivity Technology Inputs Labor Capital Land Raw materials Machinery Power Time period
- 4. The production function The quantity of inputs does not completely determine the amount of output produced.
- 5. Empirical example: US production function Studies show that the relationship between outputs and inputs in the
- 6. Calculating “A”
- 7. Shape of the production function We can have an idea about the shape of the production
- 8. Shape of the production function
- 9. Shape of the production function: Properties The production function slopes upward from left to right: this
- 10. Effect of increasing 1000 units of capital each time Marginal Product of Capital: Marginal product of
- 11. Marginal productivity The previous example shows that marginal productivity is falling as we increase the amount
- 12. Formal Definitions of Marginal Productivity Marginal Productivity of Capital: means additional output produced by each additional
- 13. Changes in the production function The production function does not remain fixed over time. It may
- 14. Demand for labor In contrast to the amount of capital, the amount of labor employed in
- 15. Determination of the demand for labor Demand for labor is determined based on the marginal product
- 16. Determination of demand for labor To maximize profit the firm will follow the following rules: The
- 17. Determination of labor demand w* N* MPN and real wage Labor MPN Real wage The MPN
- 18. Factors that shift labor demand curve Changes in the wage do not shift the labor demand
- 19. Shift of the labor demand curve A beneficial supply shock, such as invention of a new
- 20. Supply of labor We have seen that firm’s demand for labor depend on labor productivity and
- 21. Labor supply curve Labor supply curve looks the same as the supply curve we studied before.
- 22. Factors that shift the labor supply curve Left Left Right Right
- 23. Labor market equilibrium w* MPN and real wage labor MPN/demand for labor Real wage A Labor
- 24. When profit maximizing wage is higher than equilibrium wage Labor market equilibrium is at point A.
- 25. Effects of adverse supply shock W2 N2 real wage labor ND 1 B N1 ND2 A
- 26. What if all workers are not alike? We assumed that all workers are alike. By this,
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