Monday, May 01, 2006

Factor Markets

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?

3 comments:

forsnic said...

(5.) I'm going to have to disagree with the statement about Jeter being the highest paid player in 2000. I could not find a single source with that piece of info,other sources pointed to Carlos Delgado, Kevin Brown,. BUT that is besides the point, they are still paid too much to simply swing a bat or throw a ball! i know this is an understatement, but compared to (other) hardworking individuals in this country, it simply doesnt measure up. The biggest endorsement goes to a baseball player, Alex Rodriguez(darn good player), signed for 252 million of 2001. This is more than Michael Jordans biggest deal. Heres my thought on the increase of salaries (about 10-15 million in the past five/six yrs); everything costs more than it did in 2000 so why not salaries? also the fact that some players demand it or they wont play (lame greedy people). other than that i got nothing for now.

forsnic said...

In the early years of professional baseball the owners controlled the salaries of the players and decided where they could play and what they would be paid. The players were bound to their team by the Reserve Clause that stated, the services of a player will be reserved exclusively for that team for the next season. This resulted in keeping the player’s salaries artificially low because the players were not allowed to offer their services to any other team. The Reserve Clause was in effect for more than One Hundred years of baseball history. It is obviously no longer in effect and we arrive at this point in history with overpaid players!!!!!!

Joe Madden said...

A-Rod is making the most cash out of baseball players with a 22 million dollar contract w/ the Yanks....this is because the texas rangers signed him for a 7 year, 250 million deal...there is a high demand for this labor force, and very little supply of players like Lebron James or Kobe Bryant....i'm pretty sure that Shaq is the highest paid player in the league right now, but it's not as much as A-Rod, because there's no salary cap in baseball (only luxury tax that george steinbrener is willing to pay)...it is in my opinion that the entire AL-East is an over priced league that is full of dead weight loss (Johnny Damon).