3.2 — Marginal Productivity Theory — Class Content
Overview
Today we continue the marginalist revolution.
Readings
Required Readings
- Ch.9 “The Transition to Neoclassical Economics: Marginal Analysis Extended” up to Profits and Interest (p.260) in Landreth & Colander
- Ch.11 “Marginal productivity and factor prices” in Blaug
Recommended Readings:
The following Wikipedia entries can also provide more background:
Questions to Help Your Reading
- How are the prices of factors of production (land, labor, capital, etc) determined?
- What is the problem of imputation?
- What is marginal (physical) product? What is average (physical) product?
- What are returns to scale? How are they different from economies of scale?
- How does the assumption of competitive markets affect the answer to many of these questions?
- What is “product exhaustion?”
- Is there a moral connation of factors of production being paid their marginal products?
Slides
Below, you can find the slides in two formats. Clicking the image will bring you to the html version of the slides in a new tab. The lower button will allow you to download a PDF version of the slides.
You can type h to see a special list of viewing options, and type o for an outline view of all the slides.
I suggest printing the slides beforehand and using them to take additional notes in class (not everything is in the slides)!
Assignments
Participation/Discussion Board Posts Due 8 PM Fri Oct 28
This week’s graded discussion is worth 5 points, and can be a combination of discussion in class, and/or posts on the Blackboard Discussion Board by 8 PM this Friday October 28.
Tournament Votes
The final round of the Pre-Classical division of the “Most Interesting Economist in History” tournament is live. Please post your votes in the discussion board.