chapterchaptersixteensixteen©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.Preparedby:Fernando&YvonnQuijanoTheMarketsforLaborandOtherFactorsofProduction2of34©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER16:TheMarketsforLaborandOtherFactorsofProductionAfterstudyingthischapter,youshouldbeableto:Explainhowfirmschoosetheprofit-maximizingquantityofworkerstoemploy.Explainhowpeoplechoosethequantityoflabortosupply.Explainhowequilibriumwagesaredeterminedinlabormarkets.Usedemandandsupplyanalysistoexplainwhycompensatingdifferentials,discrimination,andlaborunionscausewagestodiffer.Discusstherolepersonneleconomicscanplayinhelpingfirmsdealwithhumanresourcesissues.Showhowequilibriumpricesaredeterminedinthemarketsforcapitalandnaturalresources.WhyAretheNewYorkMetsPayingCarlosBeltrana$17MillionSalary?LEARNINGOBJECTIVES123…wagesaredeterminedinthelabormarketbythedemandandsupplyoflabor…4563of34©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER16:TheMarketsforLaborandOtherFactorsofProductionTheMarketsforLaborandOtherFactorsofProductionFactorsofproductionLabor,capital,naturalresources,andotherinputsusedtoproducegoodsandservices.4of34©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER16:TheMarketsforLaborandOtherFactorsofProductionTheDemandforLaborDeriveddemandThedemandforafactorofproductionthatisderivedfromthedemandforthegoodthefactorproduces.LEARNINGOBJECTIVE15of34©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,AnthonyPatrickO’Brien—1sted.CHAPTER16:TheMarketsforLaborandOtherFactorsofProductionTheDemandforLaborTheMarginalRevenueProductofLaborMarginalproductoflaborTheadditionaloutputafirmproducesasaresultofhiringonemoreworker.Marginalrevenueproductoflabor(MRP)Thechangeinthefirm’srevenueasaresultofhiringonemoreworker.6of34©2006PrenticeHallBusinessPublishingEconomicsR.GlennHubbard,Anthon...
