Class Notes (836,365)
Canada (509,756)
Economics (1,590)
ECO101H1 (575)
Jack Carr (83)
Lecture

Markets for Factors of Production

3 Pages
121 Views
Unlock Document

Department
Economics
Course
ECO101H1
Professor
Jack Carr
Semester
Winter

Description
Topic 12 J Markets for Factors of Production (Jan 10 )h Outline: 1. The Factors of Production 2. Derived Demand for Labor: An Example; - MRP(VMP) of labor; - Profit-Maximizing Behavior of Competitive Firm; - Demand for Labor = MRP of Labor - P=MC & W=VMP 3. Interdependence of Product and Factor Markets 4. Workers are Paid their MRPVMP z The Factors of Production -- Labor; -- Capital (equipment; structures); -- Land; z Derived Demand for Labor Insight: Demand for factors is a derived demand; 1. (VMP) Value of Marginal Product = (MRP) Marginal Revenue Product -- Economic explanation of how compensation is determined; e.g. Firm Produces Widgets (Perfect Competition); - Labor is variable factors (principle of DMP applies); - Therefore assumed short-term, and fixed costs exist; - P=$5, Wage(W) = $150day Number of workers Total Product Marginal Product VMPMRP (PxMP) 0
More Less

Related notes for ECO101H1

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit