Chapter 26 Flashcards
The demand for goods and services is called ____ demand, while the demand for resources is called ____ demand.
final; derived
Which statement is true?
A change in final demand brings about a change in derived demand
The additional revenue obtained by selling the output produced by one more unit of a resource is its
marginal revenue product.
In general, the MRP _____ as output increases.
declines
Productivity is _________ per unit of ___________.
output; input
The firm will rent more and more land until the rent and the ____ of the last unit of land hired are equal.
MRP
Workers in one country are more productive than workers in another country because
they have more complementary factors to work with.
The demand for resources is based on
both the demand for the final product and the productivity of the resource.
The additional output that one additional input of labor is responsible for is its
marginal physical product.
A rise in the wage rate would lead to a movement
up the MRP curve and a decline in the number of workers hired.
The firm’s demand schedule for a resource is its _____ schedule.
MRP
A firm will operate at that point where _____ is equal to 1.
the MRP of capital/price of capital
A firm will keep hiring more and more of a resource up to the point where its MRP equals
its price
If the MRP of the last worker hired is lower than the wage rate, the firm has
hired too many workers.
The most effective way to increase the productivity of labor would be to
increase capital
As output rises,
both marginal revenue product and marginal physical product fall.
How much of a resource a firm will purchase depends on
All of the choices are correct.
the price of that resource.
the productivity of that resource.
the selling price of the final product that the resource helps to produce.
the selling prices of close substitutes of the final product.
A fall in the demand for the final product brings about
a fall in derived demand.
A firm will continue hiring labor as long as the MRP of labor _______ the market wage rate.
is greater than
The maximum units of input you would possibly hire would be
5
An increase in the price of crude oil, a basic input into the production of gasoline, is likely to
put upward pressure on the price of gasoline.
A decline in the wage rate would
raise the quantity of labor demanded.
An increase in the demand for steel occurs. As a result, firms in the steel industry will
increase their demand for capital.
If the output per acre of land triples, then the productivity of an acre of land
has tripled
Derived demand is a demand for
resources.
