Macroeconomics

1
Macroeconomics

• ECN 3102 CHAPTER 3

2
Productivity, Output, and Employment

• The Production Function
• The Demand for Labor
• The Supply of Labor
• Labor Market Equilibrium
• Unemployment
• Relating Output and Unemployment Okuns Law

3
The Production Function

• Y AF(K, N)
• The shape of the production function
• Supply shocks

4
The Demand for Labor

• The marginal product of labor and labor demand
  an example
• How much labor do firms want to use? (Tugasan
  related with this)
• The marginal product of labor and the labor
  demand curve
• Factors that shift the labor demand curve

5
The Supply of Labor

• Supply of labor is determined by individuals
• The income-leisure trade-off
• Real wages and labor supply
• A pure substitution effect
• A pure income effect
• The substitution effect and the income effect
  together
• Factors that shift the labor supply curve

6
Labor Market Equilibrium

• Classical model of the labor marketreal wage
  adjusts quickly
• Full-employment output
• Effects of a temporary adverse supply shock on
  the labor market

7
Unemployment

• Measuring unemployment
• Changes in employment status
• How long are people unemployed
• Why there are always unemployed people

8
Relating Output and Unemployment Okuns Law

• Why is the Okuns Law coefficient 2, and not 1?