AP宏观经济学7.pptxVIP

11. Resource markets with applications to laborMPP, MRP, MFC Marginal physical product (MPP): the additional output produced as one more unit of labor is added.Marginal revenue product (MRP): the addition to the firm’s revenue as the result of an additional output for an additional unit of laborMRP = MPP × Price of the productMarginal factor cost (MFC): the additional cost for each additional unit of labor hiredWage elasticity of demandWage elasticity of demand = The higher the price elasticity of demand for the product, the higher this wage elasticityThe Jap cars in the US raised both the two elasticityThe higher the proportion of [labor costs : total costs of production], the higher this elasticityHigher education vs. oil refinery industryThe greater the number of substitute resources available, the higher this wage elasticityRobots can substitute for labor Perfectly competitive labor marketThe firm is a price-takerMFC stays the same in this market typeProfit max: MRPL=MFCLWage $Wage $ProfitsDS S=ACL=MFCLEWELabor costsD=MRPLUnits of labora. Firmb. MarketCase: security guardsNo. of guards addedTotal value of books savedMRPL11003003140010051,45050The security guards are paid $120 per day (MFCL=120) A bookstore observes that for each additional security guard hired, there is some reduction in the number of books stolen. How many guards should best be hired?Choose the highest level of labor units close to the point: MRPL = MFCLWhenever the wage rate is constant, there is a perfectly competitive resource market.Imperfectly competitive labor market Workers have to sell labor to only one firmMFCL ACLFind the profit max point:Let MFCL=MRPLFind XMDrop a line onto S curveFind WMWMonopoly WCompetitiveXMonopoly XCompetitiveWage $MFCLS=ACL = wage rateEWEWCCWMMD=MRPLUnits of laborXMXCCost min Profit max In the hire of more than one resource: L-labor, K-capitalCost minimization:In perfectly competitive resource market:Profit maximization:In perfectly com