Factors of production Flashcards
Define specific FOP.
Specific FOP are factors of a specialised nature, with only one use.
Define non-specific factors.
Non-specific FOP are factors which can be transferred to other uses.
Define factors of production.
Factors of production are defined as those resources or input, which contribute to economic activity.
Define marginal revenue product.
The marginal revenue product of a factor is the extra revenue earned from when an additional unit of a FOP is employed.
Define marginal physical product.
Marginal physical product is the extra output produced when an additional unit of FOP is employed.
Define economic rent.
Economic rent is the price paid for a FOP above its supply price.
Define transfer of earnings.
Transfer of earnings are the increase in revenue earned by switching a FOP to an alternative use.
