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Micro 5.1  Market and Minimum Wage: Econ Concepts in 60 Seconds:- Economics Lesson

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Mr. Clifford's 60 second explanation of the labor market for cooks and the affects of minimum wage. Remember that the firms are now demanding and individuals supply. Please keep in mind that these clips are not designed to teach you the key concepts.

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AP Micro: PRD (BI), PRD‑4 (EU)

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About this unit

In this unit, we apply the concepts of supply and demand to markets for factors such as labor, capital, and land. We analyze the concept of derived demand, understand how a factor's marginal product and the marginal revenue product affect the demand for the factor, and consider the role of factor prices in the allocation of scarce resources. By studying the determination of factor prices, we gain an understanding of how the market determines the distribution of income and the sources of income inequality in a market economy.

AP® is a registered trademark of the College Board, which has not reviewed this resource.

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Factor markets | AP®︎/College Microeconomics | Economics | Khan Academy

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In this unit, we apply the concepts of supply and demand to markets for factors such as labor, capital, and land. We analyze the concept of derived demand, understand how a factor's marginal product and the marginal revenue product affect the demand for the factor, and consider the role of factor prices in the allocation of scarce resources.

# data[].attributes.attachment_link.readable_text
If you're seeing this message, it means we're having trouble loading external resources on our website.

If you're behind a web filter, please make sure that the domains *.kastatic.org and *.kasandbox.org are unblocked.

To log in and use all the features of Khan Academy, please enable JavaScript in your browser.

AP Micro: PRD (BI), PRD‑4 (EU)

Skill Summary Legend (Opens a modal)

Level up on the above skills and collect up to 200 Mastery points Start quiz

Level up on the above skills and collect up to 300 Mastery points Start quiz

Level up on all the skills in this unit and collect up to 500 Mastery points! Start Unit test

About this unit

In this unit, we apply the concepts of supply and demand to markets for factors such as labor, capital, and land. We analyze the concept of derived demand, understand how a factor's marginal product and the marginal revenue product affect the demand for the factor, and consider the role of factor prices in the allocation of scarce resources. By studying the determination of factor prices, we gain an understanding of how the market determines the distribution of income and the sources of income inequality in a market economy.

AP® is a registered trademark of the College Board, which has not reviewed this resource.

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Factor markets | AP®︎/College Microeconomics | Economics | Khan Academy

# data[].attributes.attachment_link.description
In this unit, we apply the concepts of supply and demand to markets for factors such as labor, capital, and land. We analyze the concept of derived demand, understand how a factor's marginal product and the marginal revenue product affect the demand for the factor, and consider the role of factor prices in the allocation of scarce resources.

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5.2 Perfectly Competitive Labor Market and Firm: Econ Concepts in 60 Seconds- Advanced Placement

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Mr. Clifford's 60 second explanation of how to draw a perfectly competitive labor market and firm hiring workers. Notice that the perfectly elastic (horizontal) curve is now supply. Please keep in mind that these clips are not designed to teach you the key concepts.

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Inelastic Range of Demand for Monopolies

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Micro 5.3 Comparing Product and Resource Markets: Econ Concepts in 60 Seconds- Review

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Mr. Clifford's 60 second explanation of the differences between a perfectly competitive product market and a perfectly competitive resource market. Notice that the firms both have a horizontal curve but in the product market it is demand and in the resource market it is supply.

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The Marginal Product of Labor | Microeconomics Videos

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In this video on the marginal product of labor, we discuss some commons questions such as: How are wages determined? Why do most Americans earn so much by global standards? What exactly is meant by

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AP Microeconomics: 5.1-5.2  Factor Markets, Changes in Factor Demand and Factor Supply

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APMic U5 L1 introduction to factor markets

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39 Pages Posted: 10 Jul 2019

See all articles by José Azar

University of Navarra, IESE Business School; CEPR

UCLA

University of Pennsylvania - School of Social Policy & Practice; National Bureau of Economic Research (NBER)

Burning Glass Technologies

University of California, Los Angeles (UCLA) - Department of Economics

There are 2 versions of this paper

Date Written: July 5, 2019

Abstract

Why is the employment effect of the minimum wage frequently found to be close to zero? Theory tells us that when wages are below marginal productivity, as with monopsony, employers are able to increase wages without laying off workers, but systematic evidence directly supporting this explanation is lacking. In this paper, we provide empirical support for the monopsony explanation by studying a key low-wage retail sector and using data on labor market concentration that covers the entirety of the United States with fine spatial variation at the occupation-level. We find that more concentrated labor markets - where wages are more likely to be below marginal productivity - experience significantly more positive employment effects from the minimum wage. While increases in the minimum wage are found to significantly decrease employment of workers in low concentration markets, minimum wage-induced employment changes become less negative as labor concentration increases, and are even estimated to be positive in the most highly concentrated markets. Our findings provide direct empirical evidence supporting the monopsony model as an explanation for the near-zero minimum wage employment effect documented in prior work. They suggest the aggregate minimum wage employment effects estimated thus far in the literature may mask heterogeneity across different levels of labor market concentration.

Keywords: minimum wage, monopsony, oligopsony, labor markets

JEL Classification: J08, J42, J23, J80

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minimum wage employment effects and labor market concentration

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Minimum Wage Employment Effects and Labor Market Concentration

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39 Pages Posted: 10 Jul 2019 See all articles by José Azar University of Navarra, IESE Business School; CEPR UCLA University of Pennsylvania - School of Social Policy & Practice; National Bureau of Economic Research (NBER) Burning Glass Technologies University of California, Los Angeles (UCLA) - Department of Economics There are 2 versions of this paper Date Written: July 5, 2019 Why is the employment effect of the minimum wage frequently found to be close to zero?

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1. How are factors of production—resources like land, labor, and capital— purchased in factor markets?

2. What determines the factor distribution of income?

3. How is the demand for a factor of production determined?

4. How does the demand for factors lead to the marginal productivity theory of income distribution?

5. How does a worker’s decision about time preference gives rise to labor supply?

6. How do we find equilibrium in the labor market?

7. What are sources of wage disparities and what is the role of discrimination?

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Define (using graphs where appropriate) key terms and concepts relating to factor markets.

Explain (using graphs where appropriate) the relationship between factors of production, firms, and factor prices.

Calculate (using data from a graph or table where appropriate) the marginal revenue product and marginal resource cost.

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Factor prices provide incentives and convey information to firms and factors of production.

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APMic Unit 5 Lesson 1 - Factor Markets Flashcards | Quizlet

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Start studying APMic Unit 5 Lesson 1 - Factor Markets. Learn vocabulary, terms, and more with flashcards, games, and other study tools.

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Factors of production (labor, capital, and land) respond to factor prices (wages, interest, and rent), and employers’ (firms’) decision to hire is based on the productivity of the factors, output price, and cost of the factor.

The quantity of labor demanded is negatively related to the wage rate, while the quantity of labor supplied is positively related to the wage rate in a given labor market, other things constant.