Module 2 ("Production and Distribution") dealt with the relation between output and inputs and with the firm's decision about how much of each factor of production to employ. As applied to labor, we saw that firms demand labor up to the point where the marginal product of labor equals the wage rate. This module deals with the household's decision about how much labor to supply. It shows how the labor supply choice is affected by technological shocks, and how such technological changes alter labor supply, real wages, labor productivity, and output in the long run. Module 5 ("Business Cycles") will examine the short-run behavior of these variables as well as the cyclical behavior of unemployment.