69: Introduction and Factor Demand Flashcards

1
Q

factor of production

A

resource used by firms to produce goods and services that are consumed by households

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2
Q

physical capital

A

manufactured equipment and resources

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3
Q

human capital

A

improved labor from education, knowledge

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4
Q

derived demand

A

demand for the factor comes from the demand for the firm’s output

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5
Q

how labor contributes to income

A

wages and salaries

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6
Q

how capital contributes to income

A

profits from stocks

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7
Q

how land contributes to income

A

profits from renting out land or buildings

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8
Q

how enterprise contributes to income

A

profits from entrepreneurial success

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9
Q

factor distribution of income

A

division of total income among land, labor, capital, and enterprise

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10
Q

marginal cost of worker in perfect comp

A

wage rate

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11
Q

marginal product of labor

A

additional output each marginal worker can produce

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12
Q

value of the marginal product of labor

A

VMPL = P x MPL

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13
Q

individual firm’s demand curve in perfect comp

A

VMPL

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14
Q

causes of shifts to factor demand curve (3)

A

changes in price of produce, supply of other factors, tech

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