Microeconomics 2011 Chapter 18 微观经济 知识介绍.ppt

My role for you;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.;Economists call all natural resources land. Renewable natural resource can be used repeatedly and not be depleted. Nonrenewable natural resource can only be used once and cannot be replaced. ;Entrepreneurship Entrepreneurship services are not traded in markets. Entrepreneurs receive the profit or bear the loss that results from their business decisions.;The demand for a factor of production is a derived demand—it is derived from the demand for the goods that it is used to produce. The quantities of factors of production demanded are a consequence of firms’ output decisions. A firm hires the quantities of factors of production that maximize its profit. The value to the firm of hiring one more unit of a factor of production is called the value of marginal product.;The Demand for a Factor of Production;Table 18.1 shows the calculation of VMP. From the firm’s total product schedule, calculate the marginal product of labor.;VMP equals marginal product of labor multiplied by the market price of the good produced.;The Firm’s Demand for Labor The value of the marginal product of labor (VMP) tells us what an additional worker is worth to a firm. VMP tells us the revenue that the firm earns by hiring one more worker. The wage rate tells us what an additional worker costs a firm. VMP and the wage rate together determine the quantity of labor demanded by a firm.;The firm maximizes its profit by hiring the quantity of labor at which VMP = the wage rate. If VMP exceeds the wage rate, the firm can increase profit by employing one more wo