微观经济学讲义第14章要素投入品市场.ppt

,Chapter 14,Markets for Factor Inputs,Chapter 1,Slide 2,Topics to be Discussed,Competitive Factor MarketsEquilibrium in a Competitive Factor MarketFactor Markets with Monopsony PowerFactor Markets with Monopoly Power,Chapter 1,Slide 3,Competitive Factor Markets,Characteristics1)Large number of sellers of the factor of production2)Large number of buyers of the factor of production3)The buyers and sellers of the factor of production are price takers,Chapter 1,Slide 4,Competitive Factor Markets,Demand for a Factor Input When Only One Input Is VariableDemand for factor inputs is a derived demandderived from factor cost and output demand,Chapter 1,Slide 5,Competitive Factor Markets,AssumeTwo inputs:Capital(K)and Labor(L)Cost of K is r and the cost of labor is wK is fixed and L is variable,Demand for a Factor Input WhenOnly One Input Is Variable,Chapter 1,Slide 6,Competitive Factor Markets,ProblemHow much labor to hire,Demand for a Factor Input WhenOnly One Input Is Variable,Chapter 1,Slide 7,Competitive Factor Markets,Measuring the Value of a Workers OutputMarginal Revenue Product of Labor(MRPL)MRPL=(MPL)(MR),Demand for a Factor Input WhenOnly One Input Is Variable,Chapter 1,Slide 8,Competitive Factor Markets,Assume perfect competition in the product marketThen MR=P,Demand for a Factor Input WhenOnly One Input Is Variable,Chapter 1,Slide 9,Competitive Factor Markets,QuestionWhat will happen to the value of MRPL when more workers are hired?,Demand for a Factor Input WhenOnly One Input Is Variable,Chapter 1,Slide 10,Marginal Revenue Product,Hours of Work,Wages($perhour),Chapter 1,Slide 11,Competitive Factor Markets,Choosing the profit-maximizing amount of laborIf MRPL w(the marginal cost of hiring a worker):hire the workerIf MRPL w:hire less laborIf MRPL=w:profit maximizing amount of labor,Demand for a Factor Input WhenOnly One Input Is Variable,Chapter 1,Slide 12,Hiring by a Firm in theLabor Market(with Capital Fixed),Quantity of Labor,Price ofLabor,Why not hire fewer or more workers than L*.,Chapter 1,Slide 13,Competitive Factor Markets,If the market supply of labor increased relative to demand(baby boomers or female entry),a surplus of labor would exist and the wage rate would fall.QuestionHow would this impact the quantity demanded for labor?,Demand for a Factor Input WhenOnly One Input Is Variable,Chapter 1,Slide 14,A Shift in the Supply of Labor,Quantity of Labor,Price ofLabor,Chapter 1,Slide 15,Competitive Factor Markets,Comparing Input and Output Markets,Chapter 1,Slide 16,Competitive Factor Markets,Comparing Input and Output MarketsIn both markets,input and output choices occur where MR=MCMR from the sale of the outputMC from the purchase of the input,Chapter 1,Slide 17,Competitive Factor Markets,ScenarioProducing farm equipment with two variable inputs:LaborAssembly-line machineryAssume the wage rate falls,Demand for a Factor Input WhenSeveral Inputs Are Variable,Chapter 1,Slide 18,Competitive Factor Markets,QuestionHow will the decrease in the wage rate impact the demand for labor?,Demand for a Factor Input WhenSeveral Inputs Are Variable,Chapter 1,Slide 19,Firms Demand Curve for Labor(with Variable Capital),Hours of Work,Wages($perhour),0,5,10,15,20,40,80,120,160,Chapter 1,Slide 20,Assume that all firms respond to a lower wageAll firms would hire more workers.Market supply would increase.The market price will fall.The quantity demanded for labor by the firm will be smaller.,Competitive Factor Markets,Industry Demand for Labor,The Industry Demand for Labor,Labor(worker-hours),Labor(worker-hours),Wage($perhour),Wage($perhour),0,5,10,15,0,5,10,15,50,100,150,L0,Firm,Industry,Chapter 1,Slide 22,The Industry Demand for Labor,QuestionHow would a change to a non-competitive market impact the derivation of the market demand for labor?,Chapter 1,Slide 23,The Demand for Jet Fuel,ObservationsJet fuel is a factor(input)costCost of jet fuel1971-Jet fuel cost equaled 12.4%of total operating cost1980-Jet fuel cost equaled 30.0%of total operating cost1990s-Jet fuel cost equaled 15.0%of total operating cost,Chapter 1,Slide 24,The Demand for Jet Fuel,ObservationsAirlines responded to higher prices in the 1970s by reducing the quantity of jet fuel usedTon-miles increased by 29.6%&jet fuel consumed rose by 8.8%,Chapter 1,Slide 25,The Demand for Jet Fuel,ObservationsThe demand for jet fuel impacts the airlines and refineries alikeThe short-run price elasticity of demand for jet-fuel is very inelastic,Chapter 1,Slide 26,Short-run Price Elasticityof Demand for Jet Fuel,American-.06Delta-.15Continental-.09TWA-.10Northwest-.07United-.10,AirlineElasticityAirlineElasticity,Chapter 1,Slide 27,The Demand for Jet Fuel,QuestionHow would the long-run price elasticity of demand compare to the short-run?,Chapter 1,Slide 28,The Short-and Long-RunDemand for Jet Fuel,Quantity of Jet Fuel,Price,Chapter 1,Slide 29,Competitive Factor Markets,The Supply of Inputs to a FirmDetermining how much of an input to purchaseAssume a perfectly competitive factor market,A Firms Input Supply in aCompetitive Factor Market,Yards ofFabric(thousands),Yards ofFabric(thousands),Price($peryard),Price($peryard),Chapter 1,Slide 31,Competitive Factor Markets,The Market Supply of InputsThe market supply for physical inputs is upward slopingExamples:jet fuel,fabric,steelThe market supply for labor may be upward sloping and backward bending,Chapter 1,Slide 32,Competitive Factor Markets,The Supply of LaborThe choice to supply labor is based on utility maximizationLeisure competes with labor for utilityWage rate measures the price of leisureHigher wage rate causes the price of leisure to increase,Chapter 1,Slide 33,Competitive Factor Markets,The Supply of LaborHigher wages encourage workers to substitute work for leisure(i.e.the substitution effect)Higher wages allow the worker to purchase more goods,including leisure which reduces work hours(i.e.the income effect),Chapter 1,Slide 34,Competitive Factor Markets,The Supply of LaborIf the income effect exceeds the substitution effect the supply curve is backward bending,Chapter 1,Slide 35,Backward-Bending Supply of Labor,Hours of Work per Day,Wage($perhour),Substitution and IncomeEffects of a Wage Increase,Hours of Leisure,Income($perday),0,240,8,24,Chapter 1,Slide 37,Labor Supply for One-andTwo-Earner Households,Female Percent of Labor Force1950-29%1999-60%,Elasticities of Labor Supply(Hours Worked),Heads HoursSpouses HoursHeads Hourswith Respect towith Respect towith Respect toGroupHeads WageSpouses WageSpouses Wage,Unmarried males.026(no children)Unmarried females.106(with children)Unmarried females.011(no children)One-earner family-.078(with children)One-earner family.007(no children)Two-earner family-.002-.086-.004(with children)Two-earner family-.107-.028-.059(no children),Chapter 1,Slide 39,Equilibrium in aCompetitive Factor Market,A competitive factor market is in equilibrium when the price of the input equates the quantity demanded to the quantity supplied.,Labor Market Equilibrium,Number of Workers,Number of Workers,Wage,Wage,Competitive Output Market,Monopolistic Output Market,Chapter 1,Slide 41,Labor Market Equilibrium,Equilibrium in a Competitive Output MarketDL(MRPL)=SLwC=MRPLMRPL=(P)(MPL)Markets are efficient,Equilibrium in a Monopolistic Output MarketMR PMRP=(MR)(MPL)Hire LM at wage wMvM=marginal benefit to consumerswM=marginal cost to the firm,Chapter 1,Slide 42,Labor Market Equilibrium,Equilibrium in a Competitive Output MarketDL(MRPL)=SLwC=MRPLMRPL=(P)(MPL)Markets are efficient,Equilibrium in a Monopolistic Output MarketProfits maximizedUsing less than the efficient level of input,Chapter 1,Slide 43,Economic RentFor a factor market,economic rent is the difference between the payments made to a factor of production and the minimum amount that must be spent to obtain the use of that factor.,Equilibrium in aCompetitive Factor Market,Chapter 1,Slide 44,Economic Rent,Number of Workers,Wage,0,The economic rent associated with theemployment of labor is the excess of wages paid above the minimum amount neededto hire workers.,Chapter 1,Slide 45,Economic Rent,QuestionWhat would be the economic rent if SL is perfectly elastic or perfectly inelastic?,Chapter 1,Slide 46,Land:A Perfectly Inelastic SupplyWith land inelastically supplied,its price is determined entirely by demand,at least in the short run.,Equilibrium in aCompetitive Factor Market,Chapter 1,Slide 47,Land Rent,Number of Acres,Price($peracre),Chapter 1,Slide 48,Pay in the Military,During the Civil War 90%of the armed forces were unskilled workers involved in ground combat.Today,only 16%are unskilled workers involved in ground combat.,Chapter 1,Slide 49,Pay in the Military,Shortages of skilled personnel has occurred?Why?Hint:If there is a shortage,the wage must be below the?,Chapter 1,Slide 50,The Shortage ofSkilled Military Personnel,Number of Skilled Workers,Wage,Chapter 1,Slide 51,Pay in the Military,Military pay is based on years of service not MRP.MRP increases and the private sector pay is greater than military pay.Many leave the military.,Chapter 1,Slide 52,Pay in the Military,SolutionSelective reenlistment bonusesBase pay on MRP,Chapter 1,Slide 53,Factor Markets with Monopsony Power,AssumeThe output market is perfectly competitive.Input market is pure monopsony.,Chapter 1,Slide 54,Marginal and Average Expenditure,Units of Input,Price(per unitof input),0,1,2,3,4,6,5,5,10,15,20,Chapter 1,Slide 55,Factor Markets with Monopsony Power,Examples of Monopsony PowerGovernmentSoldiersMissilesB2 BombersNASAAstronautsCompany town,Chapter 1,Slide 56,Monopsony Power inthe Market for Baseball Players,Baseball owners created a monopsonistic cartelReserve clause prevented competition for players1975-Free agency after six years1969-Average salary was$42,000($200,000 in 1999 dollars)1997-Average salary was$1,383,578,Chapter 1,Slide 57,Baseball owners created a monopolistic cartel1975 salaries were 25%of team expenditures1980 salaries were 40%of team expenditures,Monopsony Power inthe Market for Baseball Players,Chapter 1,Slide 58,Teenage Labor Marketsand the Minimum Wage,When the minimum wage rose in New Jersey in 1992 from$4.25 to$5.05,a survey conducted found a 13%increase in employment.,Chapter 1,Slide 59,ExplanationsReduction in fringe benefitsLower pay for more productive workersMonopsony market,Teenage Labor Marketsand the Minimum Wage,Chapter 1,Slide 60,FindingsNone of the explanations are validated by the survey resultsIndicates of the need for further study,Teenage Labor Marketsand the Minimum Wage,Chapter 1,Slide 61,Factor Markets with Monopoly Power,Just as buyers of inputs can have monopsony power,sellers of inputs can have monopoly power.The most important example of monopoly power in factor markets involves labor unions.,Chapter 1,Slide 62,Monopoly Power of Sellers of Labor,Number of Workers,Wageperworker,Chapter 1,Slide 63,SL,DL,MR,Monopoly Power of Sellers of Labor,Number of Workers,Wageperworker,A,L*,w*,Chapter 1,Slide 64,The primary determinant of controlling wage and economic rent is controlling the supply of labor,Factor Markets with Monopoly Power,Chapter 1,Slide 65,A Two-Sector Model of Labor EmploymentUnion monopoly power impacts the nonunionized part of the economy.,Factor Markets with Monopoly Power,Chapter 1,Slide 66,Wage Determination inUnionized and Nonunionized Sectors,Number of Workers,Wageperworker,Chapter 1,Slide 67,Bilateral MonopolyMarket in which a monopolist sells to a monopsonist.,Factor Markets with Monopoly Power,Chapter 1,Slide 68,Bilateral Monopoly,Numberof Workers,Wageperworker,5,10,15,20,25,10,20,40,Chapter 1,Slide 69,Bilateral Monopoly,ObservationsHiring without union monopoly powerMRP=ME at 20 workers and w=$10/hrUnions objectiveMR=MC at 25 workers and w=$19/hr,Chapter 1,Slide 70,Bilateral Monopoly,Who Will Win?The union will if its threat to strike is credible.The firm will if its threat to hire non-union workers is credible.If both make credible threats the wage will be at wc.,Chapter 1,Slide 71,The Decline of Private Sector Unionism,ObservationsUnion membership and monopoly power has been declining.Initially,during the 1970s,union wages relative to nonunion wages fell.,Chapter 1,Slide 72,ObservationsIn the 1980s union wages stabilized relative to non-union wages.In the 1990s membership has been falling and wage differential has remained stable.,The Decline of Private Sector Unionism,Chapter 1,Slide 73,ExplanationThe unions have been attempting to maximize the individual wage rate instead of total wages paid.The demand for unionized employees has probably become increasingly elastic as firms find it easier to substitute capital for skilled labor.,The Decline of Private Sector Unionism,Chapter 1,Slide 74,Wage Inequality-HaveComputers Changed the Labor Market?,1950-1980Relative wage of college graduates to high-school graduates hardly changed1980-1995The relative wage grew rapidly,Chapter 1,Slide 75,Wage Inequality-HaveComputers Changed the Labor Market?,In 1984,25.1%of all workers used computers1993-46.6%1999-nearly 60%,Chapter 1,Slide 76,Wage Inequality-HaveComputers Changed the Labor Market?,Percent change in use of computers College degrees1984-1993-42 to 70%Less than high school degree5 to 10%With high school degree19 to 35%,Chapter 1,Slide 77,Wage Inequality-HaveComputers Changed the Labor Market?,Growth in wages-1983-1994College graduates using computers-11%Non-computer users-less than 4%,Chapter 1,Slide 78,Wage Inequality-HaveComputers Changed the Labor Market?,1993-1997High school dropouts out of school less than 10 years earned 29%less than high school graduates1963-The differential was only 19%,Chapter 1,Slide 79,Wage Inequality-HaveComputers Changed the Labor Market?,1993-1997Average weekly wage for college graduates(out of school less than 10 years)was 96%higher than high school graduates.College graduation premium has more than doubled.,Chapter 1,Slide 80,Summary,In a competitive input market,the demand for an input is given by the MRP,the product of the firms marginal revenue,and the marginal product of the input.A firm in a competitive labor market will hire workers to the point at which the marginal revenue product of labor is equal to the wage rate.,Chapter 1,Slide 81,Summary,The market demand for an input is the horizontal sum of the industry demands for the input.When factor markets are competitive,the buyer of an input assumes that its purchase will have no effect on the price of the input.,Chapter 1,Slide 82,Summary,The market supply of a factor such as labor need not be upward sloping.Economic rent is the difference between the payments to factors of production and the minimum payment that would be needed to employ those factors.,Chapter 1,Slide 83,Summary,When a buyer of an input has monopsony power,the marginal expenditure curve lies above the average expenditure curve.When the input seller is a monopolist such as a labor union,the seller chooses the point on the marginal revenue product curve that bes