Ch 12 - Wages and Employment in Perfect Competition Flashcards
1
Q
The amount that an additional unit of a factor adds to a firm’s tot al revenue during a period is called…
A
Marginal Revenue Product (MRP)
2
Q
The amount a factor adds to a firm’s total cost per period is called it’s…
A
Marginal factor cost (MFC)
3
Q
When an increase in the use of one factor of production increases the demand for another, the two factors are….
A
Complementary factors of production
4
Q
If the increased use of one factor of production lowers the demand for another, the two factors are…
A
Substitute factors of production
5
Q
Because the demand for factors that produce a product depends on the demand for the product itself, factor demand is said to be…
A
Derived demand
