We have devoted a great deal of time and space to models of product markets, but factor markets are also very important. For example, one of the most important markets you will ever encounter is the market for labor. It is in this market that you will supply your labor to firms and receive a wage for your productive efforts. While there are also markets for other factors, like capital and land, we devote most of our time investigating how labor markets in particular work.
After completing this chapter, the student should be able to:
1. Discuss the decision that a worker must make between leisure and labor.
2. Understand why the supply of labor is usually upward-sloping.
3. Compute the value of the marginal ...