Chapter 12 Flashcards
What market are land, labour, capital and enterprise, bought and sold in?
The factor market
marginal revenue product
the increase in a firm’s total revenue that results from the use of one more unit of input.
Which of the following best describes a derived demand?
The price of farm land depends of the demand for crops such as wheat.
What is the key to answering the the question of whether or not to hire more labour?
The marginal productivity of labour.
The marginal revenue product (MRP) = _____ product x price.
Marginal
If the change in total revenue is $40 and the change in labour is 2, what is the marginal revenue product of labour?
$20
The _____ market is where goods and services are traded and the _____ market is where land, labour, capital and enterprise, are traded.
product; factor
An alternative formula for the marginal revenue product (MRP) = Δtotal revenue (ΔTR) ____ Δ labour.
Multiple choice question.
/
Since people want cell phones there is a demand for people to make cell phones. What kind of demand is this?
Derived demand
The _______ rate is the price paid per unit of labour services, such as for an hour of work.
Wage
_____ productivity is the key to answering the question of whether or not to hire more labour.
Marginal
A firm in a perfectly competitive labour market _____.
maximizes its profit by hiring workers to the point at which its wage rate equals MRP.
The marginal revenue product (MRP) = marginal product x ____.
Price
Any factor of production will be bought up to the point where its marginal revenue product equals its price.
True
If the marginal product is 20 and the price $2, what is the marginal revenue product?
40
The downward sloping part of the marginal revenue product curve is the firm’s ____ labour
demand curve for
The price paid per unit of labour services, such as for an hour of work, is referred to as the _____
Wage rate
The type of product market will affect the demand for labour.
True
A firm in a perfectly competitive labour market maximizes its profit by hiring workers to the point at which the ______ rate equals the marginal revenue product of labour.
Wage
Any factor of production will be purchased up until the point where its marginal revenue product equals its _____.
Price
Who makes up the labour force?
Everyone over the age of 15 who is willing and able to work.
What is the total amount of hours that people are willing to work called?
The labour force supply.
The ____ part of the marginal revenue product curve is the firm’s demand curve for labour.
downward sloping
At low levels of income, a wage increase creates the incentive for people to work ____ and at high levels of income, a wage increase will create the incentive for people to work _____.
more; less