ECON 10010 Lecture Notes - Lecture 23: Marginal Product, Market Power, Manual Labour
Document Summary
Lecture: labor demand = value of the marginal product of labor, mc = wage, mr = marginal product x price of output. If employers treat decisions differently: some give penalties for taking time off, poverty, 2 scenarios, income of of the population triples, income of of the population is cut in half, poverty measures: Step 1: calculate cost of a basket of goods and choose the basket at a subsistence level. Step 2: add up all the people whose income is below that cost: could also be all the people whose consumption is below the cost. Step 3: divide by the total population: denominator can be restricted, government uses basically one poverty measure. They want to be able to make accurate comparisons (looking at something that is consistent) Inequality: is a broader measure, inequality is any change in variation of income, many people worry about an income change that resembles a poverty increase, inequality measures:
