U10-Resource Markets With Applications to Labor Barron's

in factors markets

firms make demand, individuals make supply

what is usually supplied in factor markets?

labor

derived demand

demand of product results in demand for labor in factor market

marginal revenue product

addition to revenue with additional unit of input (labor)

least-costs rule

MPl/Pl = MPk/Pk

monopsony

one firm controls demand of labor

one factor of resource demand (think derived demand)

demand of product

another factor of resource demand (think productivity)

change in productivity (higher = more labor demand)

final factor of resource demand (think other resources)

change in prices of other resources/capital

in perfectly competitive labor market, there are

many buyers and sellers

in a monopsomy, the supply curve is

under the marginal factor cost curve

in a monopsomy, the amount of labor hired is

less than if it was perfectly competitive

in a monopsomy, the wage is

less than if it was perfectly competitive

in all factor markets (perfectly competitive or not), all firms always hire quantity of labor at the point of

intersection of MRP and MFC curve

assume city workers are more highly demanded than rural workers, what will happen to rural worker’s wage rate and total hours worked?

wage rate and total hours worked all goes down