斯科特微观经济学课件Chapter26-Inputmarketsandtheoriginsofclassconfl.ppt

Chapter 26,Input Markets and the Origins of Class Conflict,2,Return on Each Factor of Production,Division of society Workers Capitalists Landowners Fair and reasonable returns Labor Capital Land,The Return on Labor,Labor market Firms demand labor Individuals supply labor Demand for labor Derived demand From profit maximization,3,Figure 26.1,Deriving the marginal physical product of labor,4,When L units of labor are used, the marginal physical product of labor is 5 units of output, as we see from the slope of the total product curve between points a and b.,Plotting the marginal physical product of labor on the vertical axis yields a marginal physical product curve.,Total product curve,b,L,L,L,c,d,Q,Q,Q,A,B,C,Marginal Physical Product curve,L,L+1,L+2,L+3,L,L+1,L+2,L+3,The Return on Labor,Marginal physical product (MPP) curve Additional output produced Additional units of labor Marginal revenue product (MRP) MRP = (MR)(MPP) Perfectly competitive industry MRP = (P)(MPP),5,Figure 26.2,The marginal revenue product curve,6,The marginal revenue product of a monopolist falls faster than that of a perfectly competitive firm because the monopolists marginal revenue is always less than the price.,Output (Q),The Return on Labor,Optimal quantity of labor rule Profit-maximizing firm Hire labor until Marginal revenue product = Marginal cost Last unit labor hired,7,Figure 26.3,A firms decision about hiring labor,8,A profit-maximizing firm will hire units of labor up to the point at which the marginal revenue product curve intersects the marginal cost of labor curve,Output (Q),Marginal Cost of Labor,The Return on Labor,Demand curve for labor, one firm Marginal revenue product curve Amount of labor Hire at any wage Market demand for labor Horizontal sum Demands for labor All individual firms in market,9,Figure 26.4,The demand for labor,10,A firms demand curve for labor shows the amount of labor the firm will hire at various wage rates.,Wage,a,Lb,b,c,Lc,wc,wb,wa,La,Figure 26.5,Deriving the market demand for labor,11,The market demand for labor is the horizontal sum of the individual labor demand (marginal revenue product) curves of all the firms in the market,Wage,Firm 1,Firm 2,Firm 3,Market,Wage,Wage,Wage,8,10,20,7,10,15,25,45,The Return on Labor,Individual workers Work Leisure Maximize utility Individual labor supply Amount of labor Worker willing and able Various wage rates,12,Figure 26.6,The labor supply curve for an individual worker,13,Plotting the number of hours of labor supplied on the horizontal axis and the wage rate on the vertical axis yields the labor supply curve for an individual worker.,Wage,Lf,Le,wh,wf,we,Lh,The Return on Labor,Market supply for labor Horizontal sum Supplies for labor All workers in market Kinks Different reservation wages,14,Figure 26.7,Deriving the market supply curve for labor,15,The market demand for labor is the horizontal sum of the individual labor demand (marginal revenue product) curves of all the firms in the market,Wage,Worker 1,Worker 2,Worker 3,Market,Wage,Wage,Wage,4,9,11,6,8,10,18,32,26,12,9,7,The Return on Labor,Equilibrium market wage Market supply = Market demand Wage All workers in industry,16,Figure 26.8,Determining the equilibrium market wage,17,The equilibrium market wage is the wage at which the market demand for labor equals the market supply of labor.,Wage,D,S,E,we,Le,Setting the Stage for Class Conflict,Market: we Each firm hires labor Total wage = marginal revenue product Surplus Conflict surplus Workers Land owners Capital owners,18,Figure 26.9,The conflict over the surplus in a firm,19,With an equilibrium wage rate of we, the worker receives a payment equal to the area weeLe0, whereas the firm receives a surplus equal to the area Hewe.,Wage,we,Le,e,The Return on Capital,Capital Human artifact Goods - made by human beings Used - produce outputs Human capital Skills of labor,20,The Return on Capital,Build capital Borrow money interest Use own money opportunity cost Expected return to capital Financial markets Suppliers (loanable funds) Demanders (firms) Market interest rate,21,The Return on Capital,Supply of loanable funds Consumers save Earn interest Sacrifice present consumption Budget line Slope interest rate Consumer preferences - indifference curve Consumption today Consumption tomorrow,22,Figure 26.10,The decision to save,23,The consumer allocates her income between current consumption and saving such that the budget line, whose slope represents the rate of interest, is tangent to an indifference curve reflecting her preferences between consumption today and consumption tomorrow,Consumption Tomorrow,$5,500,$5,000,The Return on Capital,Supply of loanable funds Upward sloping Higher interest rates More savings Market supply curve for loanable funds Horizontal sum Individual supply curves,24,Figure 26.11,Deriving the supply curve for loanable funds,25,If future consumption is a normal good, increasing the interest rate increases saving.,Consumption Tomorrow,10%,15%,20%,C10,C20,C15,Figure 26.12,The supply of loanable funds,26,Plotting the quantity saved on the horizontal axis and the interest rate on the vertical axis yields the supply curve for loanable funds.,Interest,The Return on Capital,Demand of loanable funds Producers need funds Purchase capital goods Opportunity productive investment Return to investment,27,The Return on Capital,Rate of return on investment rate of return on investment C=R1/(1+)+R2/(1+)2+Rn/(1+)n C cost today Ri return in year i Invest if Expected rate of return market interest rate,28,The Return on Capital,Demand for loanable funds Market interest rate Loanable funds - firm Market demand curve - loanable funds Horizontal sum Demand curves - individual firms Market supply curve - loanable funds Horizontal sum Individual supply curves,29,Figure 26.13,The demand for loanable funds by a firm,30,At each interest rate, the firm will demand a quantity of loanable funds sufficient to finance all those investment projects with rates of return greater than the interest rate,Market rate of interest (r),7%,5%,$2,000,000,$1,500,000,Figure 26.14,The market demand curve for loanable funds,31,The market demand curve for loanable funds is the horizontal sum of the demand curves for loanable funds of all the individual firms in the market,0,Interest (r),Firm 1,Firm 2,Firm 3,Market,0,Interest (r),0,Interest (r),0,Interest (r),7%,5%,$1,000,$1,500,$600,$1,000,$500,$700,$2,100,$3,200,The Return on Capital,Market for loanable funds Equilibrium Intersection: demand and supply Market rate of interest Amount of funds Market rate of interest Determines - return on capital Equilibrium - market for loanable funds Marginal rate of return = market rate of interest,32,Figure 26.15,The market for loanable funds,33,The equilibrium interest rate is determined at the intersection of the market supply curve section for loanable funds and the market demand curve for loanable funds,Interest,E,r*,K*,The Return on Land,Rent - Return on factor Above amount Necessary - production process Supply of land - Perfectly inelastic Price of land Determined - demand curve Demand Determined - profitability of land Different uses,34,Figure 26.16,The market determination of rent,35,The equilibrium rent on land, re , is determined at the intersection of the vertical supply curve for land and the downward-sloping demand curve for land.,Rent,re,The Product Exhaustion Theorem,Marginal productivity theory Free-market economies Returns on factors of production Each factor Paid marginal revenue product Functional distribution of income Distribution of income Across factors of production Land, Labor, Capital,36,The Product Exhaustion Theorem,Product exhaustion theorem All factors of production Paid - value of what they produce Long-run equilibrium (perfect competition) Sum of shares = 1,37,Return on Labor in Markets - Less than Perfectly Competitive,Monopolist Sole seller - good or service Labor union Sole supplier of labor Monopsonist Sole buyer - good or service Single employer old-style factory town,38,Monopsony,Assumptions Labor supply function given No wage discrimination Wage discrimination Different wage rates Marginal expenditure (ME) Change - total wage bill From hiring one additional unit of labor,39,Figure 26.17,A monopsonistic labor market,40,A single firm buys labor services in a monopsonistic market. While the wage level in a competitive market would be wC and the employment level would be LC , the monopsonist chooses a wage level of wM and an employment level of LM.,Wage,wC,LM,wM,LC,w,Monopsony,Total expenditure (TE=wL) Total wage Profit maximization Hire labor until ME=MRP Optimal wage policy (MRP-w)/w=1/ Monopsonistic exploitation Factor paid less than MRP,41,Bilateral Monopoly,Bilateral monopoly Market One seller (union) One buyer (firm) No true demand or supply curves No price takers Actual outcome - depends on “Bargaining power”,42,Figure 26.18,A bilateral monopoly,43,Bargaining between a single seller of labor services, a union, and a single buyer leads to an indeterminate wage level, which will lie between wF and wU, and an indeterminate employment level, which will lie between LF and LU.,Wage,wC,LF,wF,LC,w,MRP,MRL,LU,wU,Alternating Offer Sequential Bargaining,A