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For more information, please see full course syllabus of AP Microeconomics
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Lecture Comments (2)

1 answer

Last reply by: Professor Jibin Park
Sat Apr 19, 2014 3:56 PM

Post by Kelly Yu on April 19, 2014

I cant watch this lecture. When it is near 2:00, it backs to the beginning of the lecture.

Labor Supply & Cost Minimization

  • Work and leisure are substitutes.
  • In a “backward-bending labor supply curve,” individuals at first work more hours when wage increases, but cut back on hours at higher wages to consume more work rather than leisure.
  • The labor supply curve shifts because of changes in preferences, population, opportunities and wealth.
  • The cost-minimization rule is where MPL/Wage = MPK/Rental Rate – you employ more workers if MPL/Wage is higher. You employ more capital if MPL/Capital is higher!
  • Marginal productive and wage equality, market power, efficiency wages and discrimination are among reasons why individuals have varying levels of income.

Labor Supply & Cost Minimization

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
  • Work vs. Leisure 1:09
    • Labor Market
    • Individual Labor Supply Curve
    • Substitution Effect
    • Income Effect
  • Backward-Bending Labor Supply Curve 5:31
  • Shifts of the Labor Supply Curve 9:59
    • Changes in Preferences and Social Norms
    • Changes in Population
    • Changes in Opportunities
    • Changes in Wealth
  • Determining the Optimal Input Mix 14:49
    • Substitutes and Complements in Factor Markets
    • Cost Minimization
  • Capital vs. Labor 20:05
    • Example 1
    • Example 2
  • Theories of Income Distribution 25:51
    • Marginal Productivity and Wage Inequality
    • Market Power
    • Efficiency Wages
    • Discrimination
  • Factor Market Example 1 32:59
  • Factor Market Example 2 39:05
  • Factor Market Example 3 42:44