Reading Guide

Reading for Unit 7

Chapter and sections in Taylor to Read
Pg #
5 Labor and Financial Capital Markets 89
Demand and Supply at Work in Labor Markets 89 Read.
  Equilibrium in the Labor Market 90
Shifts in Labor Demand 91
Shifts in Labor Supply 92
Technology and Wage Inequality: The Four-Step Process 92
Price Floors in the Labor Market: Living Wages and Minimum Wages 94
The Minimum Wage as an Example of a Price Floor 95
Demand and Supply in Financial Capital Markets 96 Skip.
Who Demands and Who Supplies in Financial Capital Markets 97
Equilibrium in Financial Capital Markets 97
Shifts in Demand and Supply in Financial Capital Markets 98
The United States as a Global Borrower: The Four-Step Process 99
Price Ceilings in Financial Capital Markets: Usury Laws 100
Don’t Kill the Price Messengers 102
Key Concepts and Summary 103
Review Questions 104
10 Perfect Competition 191
Quantity Produced by a Perfectly Competitive Firm 192 Skip. We covered in another Unit.
Comparing Total Revenue and Total Cost 192
Comparing Marginal Revenue and Marginal Costs 194
Marginal Cost and the Supply Curve 195
Profits and Losses with the Average Cost Curve 196
The Shutdown Point 196
Short-Run Outcomes for Perfectly Competitive Firms 199
Entry and Exit in the Long Run 200
How Entry and Exit Lead to Zero Profits 200
Economic Profit vs. Accounting Profit 201
The Economic Function of Profits 202
Factors of Production in Perfectly Competitive Markets 203 Read – Important
  The Derived Demand for Labor 203
The Marginal Revenue Product of Labor 204
Are Workers Paid as Much as They Deserve? 205
Physical Capital Investment and the Hurdle Rate 206
Physical Capital Investment and Long-Run Average Cost 207
Efficiency in Perfectly Competitive Markets 208
Conclusion 209
Key Concepts and Summary 209
Review Questions 211