1. Copyright © 2009 Pearson Education, Inc. 2- 1 Topic 1. Chapter 2 Overview of Labor Market

2. Copyright © 2009 Pearson Education, Inc. 2- 2 Figure 2.1: Labor Force Status of the U.S. Adult Civilian Population, April 2007

3. Copyright © 2009 Pearson Education, Inc. 2- 3 Table 2.1: Labor Force Participation Rates by Gender, 1950-2007

4. Copyright © 2009 Pearson Education, Inc. 2- 4 Figure 2.2: Unemployment Rates for the Civilian Labor Force, 1946-2006

5. Copyright © 2009 Pearson Education, Inc. 2- 5 Figure 2.3: Employment Distribution by Major Nonfarm Sector, 1954-2007 (detailed data in table on next slide)

6. Copyright © 2009 Pearson Education, Inc. 2- 6 Figure 2.4: Relationship between Wages, Earnings, Compensation and Income

7. Copyright © 2009 Pearson Education, Inc. 2- 7 Table 2.2: Nominal and Real Hourly Earnings, U.S. Nonsupervisory Workers in the Private Sector, 1980-2006

8. Copyright © 2009 Pearson Education, Inc. 2- 8 Figure 2.5: The Markets in which Firms Must Operate

9. Copyright © 2009 Pearson Education, Inc. 2- 9 Table 2.3: Labor Demand Schedule for a Hypothetical Industry

10. Copyright © 2009 Pearson Education, Inc. 2- 10 Figure 2.6: Labor Demand Curve (based on Table 2.3)

11. Copyright © 2009 Pearson Education, Inc. 2- 11 Figure 2.7: Shift in Demand for Labor Due to Increase in Product Demand

12. Copyright © 2009 Pearson Education, Inc. 2- 12 Figure 2.8: Possible Shifts in Demand for Labor Due to Fall in Capital Prices

13. Copyright © 2009 Pearson Education, Inc. 2- 13 Figure 2.9: Market Supply Curve for Paralegals

14. Copyright © 2009 Pearson Education, Inc. 2- 14 Figure 2.10: Shift in Market Supply Curve for Paralegals as Salaries of Insurance Agents Rise

15. Copyright © 2009 Pearson Education, Inc. 2- 15 Figure 2.11: Supply of Paralegals to a Firm at Alternative Market Wages

16. Copyright © 2009 Pearson Education, Inc. 2- 16 Figure 2.13: Demand and Supply at the “Market” and “Firm” Levels

17. Copyright © 2009 Pearson Education, Inc. 2- 17 Figure 2.12: Market Demand and Supply

18. Copyright © 2009 Pearson Education, Inc. 2- 18 Figure 2.14: New Labor Market Equilibrium after Demand Shifts Right

19. Copyright © 2009 Pearson Education, Inc. 2- 19 Figure 2.15: New Labor Market Equilibrium after Supply Shifts Left

20. Copyright © 2009 Pearson Education, Inc. 2- 20 Figure 2.16: New Labor Market Equilibrium after Supply Shifts Right

21. Copyright © 2009 Pearson Education, Inc. 2- 21 Figure 2.17: Effects of an Above-Market Wage

22. Copyright © 2009 Pearson Education, Inc. 2- 22 Figure 2.18: Effects of a Below-Equilibrium Wage

23. Copyright © 2009 Pearson Education, Inc. 2- 23 Figure 2.19: Labor Supply to the Military: Different Preferences Imply Different “Rents”