5劳动经济学英语课程.pptVIP

Chapter 5; Derived Demand for Labor;The demand for labor is a derived demand. That is, it is derived from the demand for the product or service that the labor is helping produce. The demand for hamburgers leads to the demand for hamburger workers. Demand for workers depends on: How the productive the workers are. The price of the product the workers are helping produce; 2. A Firm’s Short-Run Production Function;A production function shows the relationship between inputs and outputs. Assume that only two inputs are used to make a product-- labor (L) and capital (K). In the short run, at least one input is fixed. The total product for a firm in the short run is: TPSR=f(K,L), where K is fixed. ;Total product (TP) is the total product produced by each combination of labor and the fixed amount of capital. Marginal product (MP) is the change in total product associated with the addition of one more unit of labor. Average product (AP) is the total product divided by the number of units of labor. ;Total Product;Average Product;Average Product; 3. Short-Run Demand for Labor: The Perfectly Competitive Seller;Marginal revenue product (MRP) is the change in total revenue that results from hiring of an additional worker. MRP= Marginal Revenue (MR) * MP ;Marginal wage cost (MWC) is the change in total wage cost of hiring an additional worker. The Hiring Rule: Hire additional workers until MRP = MWC. ;MP? TP? L(3); Since a profit-maximizing firm will only hire an additional worker only if the worker adds more to revenues than she adds to wage costs, the MRP curve is the firm’s short run demand curve for labor.;The value of marginal product (VMP) is the extra output in dollar terms that society gains when an extra worker is employed. VMP=Price * MP For a perfectly competitive seller, MR=Price. As a result, VMP = MRP for such firms.;1. “Only that portion of the MP curve that lies below AP constitutes the basis for a firm’s short-run demand curve for labor.” Explain.