Department
EconomicsCourse Code
ECO101H1Professor
Jack CarrLecture
22This preview shows page 1. to view the full 4 pages of the document.

Thursday, January 7th, 2010.
Markets for Factors of Productions
Full-Time Earnings (Year 2007 Dollars)
Physicians (GPs): $140,832
Registered Nurses: $ 53,354
High School Teachers: $ 57,480
Actors: $ 41,694
Cooks: $ 24,353
1. What is economics explanation?
(Answer: Value of Marginal Product)
2. How good is economics explanation?
(Answer: Pretty Good)
Factors of Production
x Labour
x Capital (equipment, structures)
x Land
Insights
1. Demand for factor is a derived demand
2. Price of factor is determined by demand and supply
Example:
FIRM PRODUCES WIDGETS (Perfect Competition)
1. Labour is variable factor (principle of diminishing marginal product applies)
2. Price of widget: $5
3. Wage rate: $150 per day
www.notesolution.com
You're Reading a Preview
Unlock to view full version