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IV. UNIT IV. A. PRODUCTION AND THE. DEMAND FOR RESOURCES. 1. Marginal productivity theory. of resource demand. a. Calculation of marginal. revenue product. b. Derivation of purely. competitive seller's demand. for a resource and the. market demand for the. resource.
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IV. UNIT IV A. PRODUCTION AND THE DEMAND FOR RESOURCES 1. Marginal productivity theory of resource demand a. Calculation of marginal revenue product b. Derivation of purely competitive seller's demand for a resource and the market demand for the resource c. The resource demand for an imperfectly competitive seller 2. Marg. Productivity Theory/Inc. Dist.
MARGINAL PRODUCTIVITY THEORY OF INCOME DISTRIBUTION Each worker earns an income equal to his Marginal Revenue Product.
MARGINAL PRODUCTIVITY THEORY OF INCOME DISTRIBUTION Each worker earns an income equal to his Marginal Revenue Product. (Applies to any resource. For example an acre of land earns rent equal to its Marginal Revenue Product.)
MARGINAL PRODUCTIVITY THEORY OF INCOME DISTRIBUTION Each worker earns an income equal to his Marginal Revenue Product. AS WE WILL SEE, THIS LAW ONLY HOLDS FOR SURE (Applies to any resource. For example IF THE RESOURCE MARKET IS an acre of land earns rent equal to its Marginal Revenue Product.) COMPETITIVE
PRODUCT DEMAND PRICE QUANTITY TR CHANGE Q CHANGE TR MR $5 0 0 $5 50 5 10 10 50 $5 32 160 22 5 110 $5 240 48 16 80 5 $5 11 295 59 55 5 $5 5 5 25 64 320 UNITS OF LABOR D FOR LABOR TP MPP MRP PER DAY PER DAY 0 0 PRICE Q 50 10 1 10 3 80 22 110 2 32 4 16 80 55 3 48 11 4 59 55 5 $25 5 25 64 5
PRODUCT DEMAND PRICE QUANTITY TR CHANGE Q CHANGE TR MR $5 0 0 $5 50 5 10 10 50 $5 32 160 22 5 110 $5 240 48 16 80 5 $5 11 295 59 55 5 $5 5 5 25 64 320 UNITS OF LABOR D FOR LABOR TP MPP MRP PER DAY PER DAY 0 0 PRICE Q 50 10 1 MO 10 5 $25 22 110 2 LARRY 32 4 16 80 55 CURLY 3 48 11 MORK 4 59 55 80 3 MINDY 5 25 64 5
PRODUCT DEMAND PRICE QUANTITY TR CHANGE Q CHANGE TR MR $5 0 0 $5 50 5 10 10 50 $5 32 160 22 5 110 $5 240 48 16 80 5 $5 11 295 59 55 5 $5 5 5 25 64 320 SUPPOSE UNITS OF LABOR D FOR LABOR TP MPP MRP PER DAY PER DAY 0 0 PRICE Q 50 10 1 MO 10 5 $25 22 110 2 LARRY 32 4 16 80 55 CURLY 3 48 11 MORK 4 59 55 80 3 MINDY 5 25 64 5
PRODUCT DEMAND PRICE QUANTITY TR CHANGE Q CHANGE TR MR DOES LARRY EARN HIS $5 0 0 $5 50 5 10 10 50 $5 32 160 22 5 110 MRP? $5 240 48 16 80 5 $5 11 295 59 55 5 $5 5 5 25 64 320 SUPPOSE UNITS OF LABOR D FOR LABOR TP MPP MRP PER DAY PER DAY 0 0 PRICE Q 50 10 1 MO 10 5 $25 22 110 2 LARRY 32 4 16 80 55 CURLY 3 48 11 MORK 4 59 55 80 3 MINDY 5 25 64 5
PRODUCT DEMAND PRICE QUANTITY TR CHANGE Q CHANGE TR MR $29.00 0 0 28.50 285 28.50 10 10 285 13.72 7.00 439 32 22 154 11.15 535 6.00 48 16 96 11 590 59 5.00 10.00 55 610 5 20 64 9.53 4.00 UNITS OF LABOR D FOR LABOR TP MPP MRP PER DAY PER DAY 0 0 PRICE Q 285 10 1 1 10 $285 2 22 154 2 32 154 3 16 96 96 3 48 4 55 11 4 59 55 20 5 5 5 20 64
PRODUCT DEMAND PRICE QUANTITY TR CHANGE Q CHANGE TR MR $29.00 0 0 28.50 285 28.50 10 10 285 13.72 7.00 439 32 22 154 11.15 535 6.00 48 16 96 11 590 59 5.00 10.00 55 610 5 20 64 9.53 4.00 SUPPOSE UNITS OF LABOR D FOR LABOR TP MPP MRP PER DAY PER DAY 0 0 PRICE Q 285 10 1 1 10 $285 2 22 154 2 32 154 3 16 96 96 3 48 4 55 11 4 59 55 20 5 5 5 20 64
PRODUCT DEMAND PRICE QUANTITY TR CHANGE Q CHANGE TR MR DOES EACH WORKER EARN $29.00 0 0 28.50 285 28.50 10 10 285 HIS/HER 13.72 7.00 439 32 22 154 11.15 535 6.00 48 16 96 MRP? 11 590 59 5.00 10.00 55 610 5 20 64 9.53 4.00 SUPPOSE UNITS OF LABOR D FOR LABOR TP MPP MRP PER DAY PER DAY 0 0 PRICE Q 285 10 1 1 10 $285 2 22 154 2 32 154 3 16 96 96 3 48 4 55 11 4 59 55 20 5 5 5 20 64
PRODUCT DEMAND PRICE QUANTITY TR CHANGE Q CHANGE TR MR DOES EACH WORKER EARN $29.00 0 0 28.50 285 28.50 10 10 285 NOTICE THAT IN HIS/HER 13.72 7.00 439 32 22 154 11.15 535 6.00 48 16 96 EACH CASE THE LABOR MRP? 11 590 59 5.00 10.00 55 610 5 20 64 9.53 4.00 MARKET SUPPOSE WAS UNITS OF LABOR D FOR LABOR TP MPP MRP COMPETITIVE PER DAY PER DAY 0 0 PRICE Q 285 10 1 1 10 $285 2 22 154 2 32 154 3 16 96 96 3 48 4 55 11 4 59 55 20 5 5 5 20 64
