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Lecture Comments (14)

3 answers

Last reply by: Professor Jibin Park
Thu Apr 9, 2015 1:29 PM

Post by Kim Gyu Min on April 6, 2015

In question C on Factor market exmaples SSC losing a techonology that decreases workers productivity. MPL will go up when productivity of workers will increase so demand curve for labor will shift right not left. Am I right? Correct me if I'm wrong.

2 answers

Last reply by: Professor Jibin Park
Mon Jan 5, 2015 7:31 PM

Post by Eugene Song on January 5, 2015

I like your lecture. Would you send me your presentatin file not the image file?

0 answers

Post by Rebecca Dai on November 9, 2014

Is the labors in the last example in factor market?

0 answers

Post by Rebecca Dai on November 9, 2014

Is it true that when the price of a product a company sells at stays the same, it is perfectly competitive?

0 answers

Post by Rebecca Dai on November 9, 2014

And also in the second to last example, how do we know when we should shift the curve and when we should just lower the y-axis value? Thanks

0 answers

Post by Rebecca Dai on November 9, 2014

In the second to last example, I don't understand why unskilled labor could be the output. Labor cannot be produced. Thanks

0 answers

Post by Rebecca Dai on November 7, 2014

at 10:07, what does MPL stand for? shouldn't it just be marginal product? and what should be labeled on x-axis? Thanks

0 answers

Post by Professor Jibin Park on March 30, 2014

Because as you produce more and more of an item, productivity goes down.... the law of diminishing marginal returns.

0 answers

Post by Teddy Fogelman on March 30, 2014

Why are MP & MRP downward sloping?

Factor Markets

  • There are three factors of production: land, labor and capital.
  • Derived demand simply means that the demand from labor is closely associated with the demand for the product.
  • Marginal Revenue Product (MRP) = Marginal Product of Labor (MPL) * Price (P)
  • Value of Marginal Product of Labor (VMPL) is interchangeable with Marginal Revenue Product.
  • In order to hire the optimal amount of workers, one must follow the VMPL = wage rate rule. Do not hire someone whose wage exceeds its MRP (or VMPL).
  • Two ways to increase the MRP (or VMPL) is to have the price of the product increase or the MPL to increase.
  • Two ways to decrease the MRP (or VMPL) is to have the price of the product decrease or the MPL to decrease.

Factor Markets

Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.

  • Intro 0:00
  • Lesson Overview 0:12
  • Economy's Factors of Production 1:43
    • Land
    • Labor
    • Capital
    • Entrepreneurship
  • Why Factor Prices Matter 4:01
    • Derived Demand
    • Example
  • Total Product vs. Marginal Product 7:12
    • Total Product
    • Marginal Product
  • Value of the Marginal Product 11:06
    • Value of the Marginal Product of Labor Formula
    • Hiring Decision Rule
  • Graphing the VMPL (or MRP) Curve 16:11
  • Shifts of the Factor Demand Curve 18:19
    • Changes in the Price of Goods
    • Changes in Supply of Other Factors
    • Changes in Technology
  • Factor Market Example 22:32
  • Another Factor Market Example 32:48