4.4 — Factor Markets: Labor Markets — Class Content
- Section 1: Monday, May 2, 2021
- Section 2: Thursday, May 6, 2021Section 2, because of no class on Thursday Feb 18 and Tuesday Mar 9, and no class on Wednesday April 21, is 1 class behind Section 1.
Today we cover a topic that often does not get covered in microeconomics courses, but is important nonetheless for our purposes: markets for factors of production (e.g. land, labor, capital, supplies, etc). We discuss what determines prices in these markets, and how they vary with monopoly power and monopsony power (a buyer with market power).
Today we focus on labor markets as the main factor market, and all of us are participants in labor markets. However, the analysis today can be applied to any market for an input to production. Next class, we will look at capital markets as another factor market.Section 2 (Tu/Th) will skip 4.5 on Capital Markets, since they have 1 fewer class meeting this semester.
- Ch. 13 in @textbook
Unfortunately, older versions of the textbook do not have a chapter on factor markets. 🤷
I have put up a practice problem to give you a numerical example of monoposony. Answers will be posted there later.
You are done with graded homeworks for the semester!
Turn in Exam 1 and Exam 2 corrections by the last day of class.
Don’t forget your Op-Ed is due by Friday May 14.
I had originally meant to make 4.5 Factor Markets II: Capital Markets, but for time I cut it out to only focus on labor markets. The slides I had made are below: