tailieunhanh - Lecture Microeconomics: Theory and applications (12th edition): Chapter 17 - Browning, Zupan

Chapter 17 - Wages, rent, interest, and profit. In this chapter students will be able to: Investigate a worker's decision concerning how many work hours to supply, examine the income and substitution effects of a higher wage rate and whether the net result of a wage increase involves a worker supplying more work hours, analyze the general level of wage rates and why wages differ among jobs,. | MICROECONOMICS: Theory & Applications By Edgar K. Browning & Mark A. Zupan John Wiley & Sons, Inc. 12th Edition, Copyright 2015 Chapter 17: Wages, Rent. Interest, and Profit Prepared by Dr. Della Lee Sue, Marist College Learning Objectives Investigate a worker's decision concerning how many work hours to supply. Examine the income and substitution effects of a higher wage rate and whether the net result of a wage increase involves a worker supplying more work hours. Analyze the general level of wage rates and why wages differ among jobs. Explain why wage rates differ among jobs. Define what economists mean by the term rent. (continued) Learning Objectives (continued) Explore selling or monopoly power in intake markets and show how unions attempt to exercise such power in labor markets. Explain how the interest rate is determined through the interplay of the supply of and demand of capital. Investigate investment and the marginal productivity of capital. (continued) Learning . | MICROECONOMICS: Theory & Applications By Edgar K. Browning & Mark A. Zupan John Wiley & Sons, Inc. 12th Edition, Copyright 2015 Chapter 17: Wages, Rent. Interest, and Profit Prepared by Dr. Della Lee Sue, Marist College Learning Objectives Investigate a worker's decision concerning how many work hours to supply. Examine the income and substitution effects of a higher wage rate and whether the net result of a wage increase involves a worker supplying more work hours. Analyze the general level of wage rates and why wages differ among jobs. Explain why wage rates differ among jobs. Define what economists mean by the term rent. (continued) Learning Objectives (continued) Explore selling or monopoly power in intake markets and show how unions attempt to exercise such power in labor markets. Explain how the interest rate is determined through the interplay of the supply of and demand of capital. Investigate investment and the marginal productivity of capital. (continued) Learning Objectives (continued) Describe the relation between saving, investment, and the interest rate. Overview why interest rates differ across specific credit markets. THE INCOME―LEISURE CHOICE OF THE WORKER Investigate a worker's decision concerning how many work hours to supply. The Income-Leisure Choice of the Worker Leisure – the portion of a worker’s time when he or she is not receiving compensation from an employer Income – not assumed to be fixed; hourly wage is fixed but the number of hours worked can vary Budget line – slope reflects wage rate received per hour of work Tradeoff: income versus leisure time Optimal choice: equality between marginal valuation of worker’s leisure time and market valuation of the individual’s work time (., wage rate) Optimal point: tangency between budget line and an indifference curve Figure - Income-Leisure Choice of the Worker Is the Income-Leisure Model Plausible? Common objection: workers do not really have the ability to