Here are some of the online notes for factor markets:
http://www.reffonomics.com/deriveddemand.html on derived demand
On hiring workers: http://apecon.us/mrpmfc.gif
1) In 2002, Boeing reduced employment by 33,000 workers. What does this decision reveal about how it viewed its MRP and MRC? Why didn't Boeing reduce employment by more than 33,000 workers? By less than 33,000?
2) Florida citrus growers say that the recent crackdown on illegal immigration is increasing the market wage rates necessary to get their oranges picked. Some are turning to $100,000 to $300,000 mechanical harvesters known as "trunk, shake and catch" pickers, which vigorously shake oranges from the trees. If widely adopted, what will be the effect ont eh demand for human orange pickers? How does a national day of protest, such as today (5/1/06), affect the labor supply and demand?
3) As output rises, which MRP curve declines more quickly - the MRP of the perfect competitor or the MRP of the imperfect competitor? Make sure to explain your answer.
4) In April of 2000, average hourly earnings in manufacturing rose to $13.71, up from $9.80 of ten years earlier. All else equal, such an increase in wages would be expected to reduce the demand for labor, and employment should fall. Instead, the demand for labor has increased dramatically with more than 20 million jobs being created during the decade of the 1990's. How can you explain this seeming discrepancy?
5) Derek Jeter was the highest paid professional baseball player in 2000. Who is the highest paid baseball player today? How much of an increase has there been since Jeter signed his contract? Are baseball players paid too much? Why or why not? Is there an explanation for why salaries have increased so much in recent years? Who sithe highest paid professional basketball player today? Do baseball players make, on average, more or less than basketball players? Why? What does this have to do with the ideas of labor markets that we've talked about since Friday?