MicroeconomicMARKETSFORFACTORSOFPRODUCTION幻灯片.ppt

18;You know that wage rates vary a lot: A server at McDonald’s earns $8 an hour. Demetrio Luna who cleans the windows of Houston’s high-rise buildings makes $12 an hour. Richard Seymour, who plays for the New England Patriots, collects a cool $25 million a year. What determines the wages that people earn? The price of oil became a big issue in 2008 as new record highs were set. What determines the prices of the natural resources that we use to produce goods and services? ;The Anatomy of Factor Markets;Market for Labor Services Labor services are the physical and mental work effort that people supply to produce goods and services. A labor market is a collection of people and firms who trade labor services. The price of labor services is the wage rate. Most labor markets have many buyers and many sellers and are competitive. In these labor markets, the wage rate is determined by supply and demand.;Market for Capital Services Capital consists of the tools, instruments, machines, buildings, and other constructions that have been produced in the past and that businesses now use to produce goods and services. These physical objects are capital goods and capital goods are traded in goods markets. This market is not a market for capital services. A market for capital services is a rental market—a market in which the services of capital are hired.;Markets for Land Services and Natural Resources Land consists of all the gifts of nature—natural resources. The market for land as a factor of production is the market for the services of land—the use of land. The price of the services of land is a rental rate. Nonrenewable natural resources are resources that can be used only once, such as oil, natural gas, and coal. The prices of nonrenewable natural resources are determined in global commodity markets.;Entrepreneurship Entrepreneurship services are not traded in markets. Entrepreneurs receive the profit or bear the loss that results from their business decisions.;The demand