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14
Markets for
Factor Inputs
Prepared by:
Fernando & Yvonn
Quijano
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall Microeconomics Pindyck/Rubinfeld, 7e.
CHAPTER 14 OUTLINE
14.1 Competitive Factor Markets
14.2 Equilibrium in a Competitive Factor Market
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14
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14.1
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14.1
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14.1
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14.1
Recall that MRPL = (MPL)(MR) and divide both sides of MRPL = w by the
marginal product of labor. Then,
(14.4)
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14.1
(14.4)
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14.1
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14.1
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14.1
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14.1
Figure 14.6
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14.1
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14.1
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14.1
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14.1
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14.1
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14.2
EQUILIBRIUM IN A COMPETITIVE
FACTOR MARKET
Figure 14.10
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14.2
EQUILIBRIUM IN A COMPETITIVE
FACTOR MARKET
Figure 14.10
Labor Market Equilibrium (continued)
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14.2
EQUILIBRIUM IN A COMPETITIVE
FACTOR MARKET
Economic Rent
For 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.
Figure 14.11
Economic Rent
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14.2
EQUILIBRIUM IN A COMPETITIVE
FACTOR MARKET
Economic Rent
Figure 14.12
Land Rent
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14.2
EQUILIBRIUM IN A COMPETITIVE
FACTOR MARKET
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14.2
EQUILIBRIUM IN A COMPETITIVE
FACTOR MARKET
Figure 14.13
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14.3
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14.3
Bargaining Power
The amount of bargaining power that a buyer or seller has is
determined in part by the number of competing buyers and
competing sellers. But it is also determined by the nature of the
purchase itself.
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14.3
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14.3
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14.4
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14.4
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14.4
Figure 14.7
Union Workers as a Percentage of Total
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14.4
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