input demand: the labor and land markets Flashcards
1
Q
derived demand
A
the demand for resources that is dependent on the demand for the outputs those resources can be used to produce
2
Q
Marginal Revenue Product
A
MRP. The additional revenue a firm earns by employing 1 additional unit of input, ceteris paribus.
3
Q
factor substitution effect
A
the tendency of firms to substitute away from a factor whose price has risen and toward a factor whose price has fallen.
4
Q
demand-determined price
A
the price of a good that is in fixed supply; it is determined exclusively by what households and firms are willing to pay for the good.
5
Q
Marginal productivity theory of income distribution
A
at equilibrium, all factors of production end up receiving rewards determined by their productivity as measured by marginal revenue product.
