Class Notes (1,100,000)
CA (630,000)
UTSG (50,000)
ECO (2,000)
ECO101H1 (700)
Lecture 22

Lecture 22-Markets for Factors of Production


Department
Economics
Course Code
ECO101H1
Professor
Jack Carr
Lecture
22

This 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