Ch 11微观经济学.pptVIP

Chapter 11 Resource Markets Demand and Supply of Resources Resource demand Firms demand resources As long as MRMC To maximize profit Resource supply People supply resources To the highest-paying alternative To maximize utility * Exhibit 1 Resource market for carpenters * Hours of labor per period E 0 Dollars per hour of labor W D S The intersection of the upward-sloping supply curve of carpenters with the downward-sloping demand curve determines the equilibrium wage, W, and the level of employment, E. The Market Demand for Resources Resource demand Derived demand Arises from the demand for the final product Market demand Sum of demands for a resource In all its uses Downward sloping * The Market Demand for Resources As price falls, producers More willing to buy Relatively cheaper Substitution in production Greater ability to buy Hire more at the same total cost * Lumber prices and housing markets Demand for lumber = derived demand 2001, increase in D for housing Increased D for lumber Increase lumber prices (68% by 2004) 2005-2007, decline in housing demand Reduced D for building products Sharp fall in lumber prices * The Market Supply of Resources Market supply Sum of all individual supply curves Upward sloping As price rises, resource suppliers More willing to sell Higher earnings More goods and services purchased More able to increase quantity supplied * Resource Price Differences Resources Flow to their highest-valued use If freely mobile Adjust across different uses until they earn the same wage Temporary differences暂记差额 Market adjustments Reallocation of resources * Exhibit 2 Market for carpenters in alternative uses * The wage differential prompts carpenters to shift from furniture making to home building until the wage is identical in the two markets (a) Home building Dh Sh Dollars per hour $25 24 S’h Hours of labor per day (thousands) 58 0 60 (b) Furniture making Df Sf Dollars per hour 20 $24 S’f Hours of labor per day (thousands) 10 0 12 Resource P