4.4 — Factor Markets — Class Notes
Contents
Wednedsay, November 11, 2020
Overview
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).
We primarily focus on labor markets as the main factor market for time, and since all of us are participants in labor markets. However, the analysis today can be applied to any market for an input to production.
Readings
See today’s suggested readings.
Slides
Practice Problems
I have put up a practice problem to give you a numerical example of monoposony. Answers will be posted there later.
Assignments
You are done with graded homeworks for the semester!
Don’t forget your Op-Ed is due by Friday November 20.