Applying Consumer Theory: Labor

Session Overview
Along with what to buy, another key decision that we make every day as economic agents is how much to work and how much to relax. The decision about supplying labor can be analyzed with the same tools used to analyze the market for pizza or movies, and we call this the analysis of the labor market. This lecture provides an overview of the economics of the labor market. The decision to nap instead of work can be analyzed by economic tools. Image courtesy of Joi Ito on Flickr. Keywords: Labor supply; Giffin good; leisure; consumer theory; labor economics; child labor.

Session Activities
Readings Before watching the lecture video, read the course textbook for an introduction to the material covered in this session:

[R&T] Chapter 7, "The Analysis of Consumer Choice." Sections 7.2. [R&T] Chapter 12, "Wages and Employment in Perfect Competition." [Perloff] Chapter 5, "Applying Consumer Theory." (optional)

Lecture Videos The lecture video for this session consists of two parts. View Full Video

Lecture 7: Applying Consumer Theory: Labor Supply (00:50:26)

Transcript (PDF)

View by Chapter

Review: Income and Substitution Effects (00:10:10) The Labor-Leisure Tradeoff (00:07:33) Impact of Wage Changes on Labor-Leisure Tradeoff (00:08:43) Determinants of Labor Supply: Change in Consumption (00:14:15) Impact of Labor Supply on Unemployment (00:09:38)

Resources

Graphs and Figures (PDF) Tables (PDF)

View Full Video

Lecture 8a: Applying Consumer Theory: Child Labor (00:13:38) Transcript (PDF)

Resources

Graphs and Figures (PDF)

Further Study
These optional resources are provided for students that wish to explore this topic more fully. Textbook Study Materials See the [Perloff] companion website for an overview of the main topics covered in the chapter, as well as quizzes, applications, and other related resources.

Chapter 5