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ECO101H1 (700)
Lecture 24

Lecture 24-Labour Markets


Department
Economics
Course Code
ECO101H1
Professor
Jack Carr
Lecture
24

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Thursday, January 14, 2010. Labour Markets
Impact of Union
Union raises wage rate (Wu > W c)
Union reduces employment (Nu < Nc) in this industry
Note: union may try to increase jobs by shifting DD to right (support import restrictions,
encourage members to purchase union made goods)
Implication of Profit-Maximizing Behaviour
W = VMP
Perfect Competition: VMP = P * MP
Imperfect Competition: VMP = MR * MP
:KDWIDFWRUV³FRUUHODWHV´DUHDVVRFLDWHGZLWKKLJK903RIZRUNHUV"
Correlates of VMP
Education
Males, 2001, Full-Time
High School: $41,218
College: $49,224
University: $71,352
Wc
SS
DD (= VMP)
Wu
u = union
c = competitive
market
W
Nu
Nc
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