ECON101 Lecture Notes - Lecture 8: Mangalore Refinery And Petrochemicals Limited

• School: University of Alberta
• Department: Economics
• Course: ECON101
• Professor: Gordon Lee

Document Summary

1) demand for factors of production: supply of labour, differences in wages, monopsony, capital markets. It will be pro table for a rm to demand additional units of a factor up to the point where mrpl = Demand for labour is determined by the optimal hiring rule. Supply of labour is a household decision utility maximization where households are deciding between hours of labour and hours of leisure. Wages should be determined by the equilibrium of supply and demand in the labour market. Why is w2 > w1: differences in training, age, experience mrp, differences in education mrp, differences in ability mrp, differences in risk, geographical differences, differences in market conditions, employment conditions, discrimination. Saving lives at pool or cleaning out garbage cans: paid more to work in toronto than edmonton because rent is so high in toronto. Paid more to account for differences in market conditions.