6. Pricing of the Factors of Production and the Labor Market

Factors of Production are economic goods: scarce means used to achieve an individual’s ends. They are land, labor and capital. Each is examined. Incomes are earned by factor owners as production takes place. There is no separated production and distribution.The price of a factor is determined by its diminishing general (discounted) marginal value productivity and the given supply (stock) of the factor in the economy. Factor pricing is by the Austrian theory of imputation. To Austrians, all costs are opportunity costs.Consumer goods and producer goods are subjectively determined by how they are used.The sixth of ten lectures from Joseph Salerno's Introduction to Austrian Economic Analysis seminar.