01:220:102 Lecture Notes - Lecture 3: Monopsony, Marginal Revenue, Human Capital

• School: Rutgers University
• Department: Economic
• Course: 01:220:102
• Professor: Michael Elgawly

Document Summary

Unit 3: chapter 14: the demand for resources. Marginal revenue productivity: change in tr / change in q or mp x price. Marginal revenue cost: change in tc / change in q. Pure comp labor market wage rate = mrc. To max profits, a monopsonist will hire up to the mrp curve. Hire fewer workers and pay lower wages than pure comp. States should decide b/c each state has a different cost of living. Mention price floors and price ceilings in research paper. Majority of people who earn min wage are career jobs not part time jobs for students. Companies like walmart hire people for min wage can afford to pay their employees more. However, most min wage workers work for smaller businesses that are not able to afford to raise the min wage. Reasons for wage differentials: marginal revenue productivity, noncompeting groups, nontransferable skills a. i.