BSL 212 Lecture Notes - Lecture 3: Normal Good, Monopolistic Competition, Budget Constraint
22 Jun 2016
School
Department
Course
Professor
Document Summary
Marginal product of labor: increment to output or increment to labor. Equilibrium wage in the free market: if you want the wage to go up, the value marginal product of labor needs to increase. If you reduce supply, this causes the wage to go up. The goal is to increase the wage that is related to the standard of living. 3 ways to increase marginal product of labor: technology: how you organize capital labor, human capital (hk): well being, helpfulness, health, training, education, physical capital (k): reducing corporate income tax. They aren"t going to save a lot of their production. In order to increase their standard: if of living, they need a push from an outside source. 2 possible outside sources are foreign investment and foreign aid. Foreign investment: doesn"t work in certain countries. Foreign aid: this is used for really poor countries. Worker productivity needs to be increased if we want to increase wages.
