AP Economics – 12/14/18

I.  Bellwork

Page 709 –  The Decline of the Summer Job

1. What are the three reasons provided for the decline of high school and college students in summer jobs?
2. Do you agree with the article?
3. Collaborate with others to find another reason why fewer students are applying for summer jobs..

II.  Objectives

• Distinguish between perfectly competitive and imperfectly competitive labor markets
• Analyze and construct supply graphs for labor for firm and perfectly competitive and imperfectly competitive labor markets
• Determine the point where workers will continued to be hired for perfectly competitive and imperfectly competitive labor markets

III.  Discussion Pages 710-712

A  Equilibrium in the Labor Market

• Figure 71.3 p 710 Perfectly competitive –
• Market Labor curve is horizontal   
• Equilibrium Wage =MFCL
• Hire until MRPL = Market Wage

B. When the Labor Market is Not Perfectly Competitive

• Monopsony – See Table 71.1 & Figure 71.4
• In perfectly competitive markets the MFCL is constant and doesn’t change
• Non perfect markets must charge hire rates to attract more workers MFCL increases

C.  Equilibrium in the Imperfectly Competitive Labor Market

• Hire until MRPL = MFCL
• Figure 71.4 P. 711 (marginal factor cost of labor is higher than the market labor supply curve)
• Figure 71.5 p 712 Equilibrium wage is less than MFCL

IV.  Classwork – 71.3

V.  Homework 71.4 Part 1 & 2

AP Economics