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1 review
by: May Thu

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# ECO211 Wages, Labor, Monopoly ECON 221

Marketplace > University of Miami > Economcs > ECON 221 > ECO211 Wages Labor Monopoly
May Thu
UM
GPA 3.8

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These notes include everything mentioned in the lecture this week with detailed graphs and explanations.
COURSE
Economic Principles and Problems 211
PROF.
David Spigelman
TYPE
Class Notes
PAGES
3
WORDS
CONCEPTS
Microeconomics, Minimum Wage, monopoly, Labor
KARMA
25 ?

1 review
lf19950726

## Popular in Economcs

This 3 page Class Notes was uploaded by May Thu on Friday March 4, 2016. The Class Notes belongs to ECON 221 at University of Miami taught by David Spigelman in Spring 2016. Since its upload, it has received 35 views. For similar materials see Economic Principles and Problems 211 in Economcs at University of Miami.

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Date Created: 03/04/16
Wednesday, March 2, 2016 ECO 211 Wages, Labor, Monopoly - Minimum wage •If wage is above E (Equilibrium), then the quantity demanded for labor is less than the quantity supplied for labor (A < B). •There will be an excess of labor causing unemployment. - Maximum Wage If wage is below E (Equilibrium), then • the quantity demanded for labor is higher than the quantity supply for labor (A > B) •There will be a deﬁcit of labor causing the wage to go back up to the equilibrium point. Maximum wage is ineffective because • the price will always go back to E. 1 Wednesday, March 2, 2016 -Firm: Equilibrium from the industry (Marginal Cost= Marginal Beneﬁt) - Demand = Value of Marginal Product of labor (D=VMP ) L - Price x Marginal Product of Labor =VMP L - Price cannot be controlled by ﬁrm or industry (controlled by the market), but industries can manipulate Marginal Product of Labor - Raising standards of living • Raise the wage to improve standards of living • To raise wage, shift the demand curve up • To raise wage there must be an increase in human capital (HK), physical capital (K), or technology (T) 2 Wednesday, March 2, 2016 • Wage increases =VMP increLses = HK, K, T increases = Price x Marginal Product of Labor increases • To accumulate capital for growth: • Domestic savings • Foreign investments • Foreign aid - Monopoly - to encourage innovation - High Fixed Cost Natural Monopoly - type of industry regulated by setting output - Walmart Type Natural Monopoly - doesn’t have high ﬁxed cost (everything is cheaper) - output is not regulated, but the number of stores allowed to open is regulated (example: There can only be 3 Walmarts in Miami) -Average Cost= Average Variable Cost+ Average Fixed Cost -AC curve is downward sloping -This graph is for a ﬁrm that is a natural monopoly. 3

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