AP Economics – 12/09/19

I.  Bellwork

• List the four factors of production and provide an example for each

II.  Objectives

• Describe features that make markets for factors of production—resources like land, labor, and capital—different from goods markets
• Explain how factor markets determine the factor distribution of income
• Discuss how the demand for a factor of production is determined

III.  Introduction and factor Demand pages 688-696

A.  The Economy’s Factors of Production

1. The Factors of Production
2. Why Factor Prices Matter: The Allocation of Resources
3. Factor Incomes and the Distribution of Income
4. The Factor Distribution of Income in the United States

B.  Marginal Productivity and Factor Demand

1. Value of the Marginal Product
2. Value of the Marginal Product and Factor Demand
3. Shifts of the Factor Demand Curve

IV.   Practice

A. Add a column and determine marginal product

B.  Add a column to the table and compute VMPL. Suppose the price of lemonade is $2 per cup.

C.  If the wage of a lemonade stand worker is $8, how many units of labor will be hired?

V.  Classwork

Micro Unit 5, Question 8- Hiring Workers

Found in Section 13 Folder on iLearn (Module 69 – Student

1. Worksheet 69.2: Hiring Workers
2. Worksheet 69.3: Value of the Marginal Product

AP Micro Economics F2019