Mater Academy/ Dual Enrollment / Principles of Microeconomics
Unit 6: Factor Markets
Support text: McConnell and Brue, Economics 18th Ed, Chapters 12, 13, 14, and 15
A. Demand for Resources
B. Labor Market. Wage Determination
C. Markets of Land and Capital
D. Cost-Minimizing Input Combination / Optimal combination of resources /less-cost combination of
resources
Objective
In this section we are going to study about the demand for economic resources (factors of production).
Assignment / Group Work and Presentations / For a TEST GRADE (Intermediate Test
#2 Grade) for TEAM 3, 4, 5 and 6 MEMBERS ONLY
A. “Demand for Resources” / Team Presentation and Classwork
1. By using “Economics” 18th Ed, Chapters 12 (pages 253-267) and additional materials, a designed team
will organize a presentation to explain the following topics to the rest of the class. Power Point
Presentations, videos, and any other visual aid are welcome to support your presentation.
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Why we are going to study the demand for resources? /As an introduction to the
presentation.
The economy’s factors of production
Significance of Resource Pricing/ Why factor prices matter
Marginal Productivity and Factor Demand
o Marginal revenue product
o Rule for employing resources
o MRP as resource demand schedule
o Resources demand under imperfect product market competition
Determinants of Resource Demand
Elasticity of Resource Demand
2. After team presentation, all students will work on and turn in the following Qs: 2 and 5page 268.
3. Team should be ready to summarize the answer all questions to the rest of the class.
B. Labor Market. Wage Determination / Team Presentation and
Classwork
1. By using “Economics” 18th Ed, Chapters 13 (pages 270-289) and additional materials, a designed
team will organize a presentation to explain the following topics to the rest of the class. Power Point
Presentations, videos, and any other visual aid are welcome to support your presentation.
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Labor
 Wages /Nominal and real wage
 General Level of Wages
 Demand, supply, and equilibrium in a pure competitive labor market.
 Labor market in a Monopsony Model
 Role of Union in the labor equilibrium. Different union models
 Minimum wage determination
 Role of Union in the labor equilibrium. Different union models
 Does the labor market work as a perfect competitive market? Why?
2. After team presentation, all students will work on and turn in the following Qs: 1, 3, and 4
page 289.
3. Team should be ready to summarize the answer all questions to the rest of the class.
C. Markets of Land and Capital / Team Presentation and Classwork
1. By using “Economics” 18th Ed, Chapters 14 (pages 296-311), a designed team will organize a
presentation to explain the following topics to the rest of the class. Power Point Presentations and any
other visual aid are welcome to support your presentation.
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Economic rent
Determination of land rent
Why does the supply curve of land is perfectly inelastic?
Demand as the only active determinant of the land rent
Is the capital supply elastic or inelastic? Why?
Interest
Loanable founds theory of interest: Supply and Demand of loanable funds
Time-value of money: Future value and present value
Range and role of interest rates
Role and purpose of usury laws
Economic profit and its functions
2. After team presentation, all students will work on and turn in the following Qs: 1, 2, 5, 6, 7,
and 10 pages 310-311.
3. Team should be ready to summarize the answer all questions to the rest of the class.
D. Optimal combination of resources /less-cost combination of
resources / Team Presentation
(Go back over textbook, chapter 12, Pg 263-265)
1. By using “Economics” 18th Ed, Chapters 12 (pages 263-266) and additional materials, a designed
team will organize a presentation to explain the following topics to the rest of the class. Power Point
Presentations and any other visual aid are welcome to support your presentation.
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Alternative Input Combinations
Determination of the optimal input mix
The cost-Minimization rule/ the least-cost rule
Profit maximization rule
Marginal productivity theory of income distribution
2. After team presentation, all students will work on and turn in the following Qs: 6, and 7, page
268.
3. Team should be ready to summarize the answer all questions to the rest of the class.
General Directions
1. Nonattendance to the presentation (team members only) will be graded as an F.
2. The rest of the students must work on questions for a classwork grade. Please
work on time.
3. Team participating in presentations could spend class time to prepare the
assignment.
4. All students must take notes and answer assigned questions per topics. Both
notes and questions must be returned on time according the following schedule:
Presentation Schedule
Period 7
 Monday 4/13/2015 and Wednesday 4/15/2015 : Individual Study and
Preparation in class
 “Demand for Resources” / Team Presentation Tuesday 4/21/2015
 “Labor Market. Wage Determination / Team Presentation Thursday
4/23/2015
 “Market of Land and Capital” / Team Presentation Monday 04/27/2015
 “Optimal combination of resources” /less-cost combination of resources /
Team Presentation Wednesday 4/29/2015
Period 6
 Tuesday 4/14/2015 and Thursday 4/16 /2015 : Individual Study and
Preparation in class
 “Demand for Resources” / Team Presentation Monday 4/20/2015
 “Labor Market. Wage Determination” / Team Presentation Wednesday
4/22/2015
 Market of Land and Capital / Team Presentation Friday 4/24/2015
 “Optimal combination of resources” /less-cost combination of resources /
Team Presentation Tuesday 4/28/2015.