chap15 - Chapter 15 Resource markets Economic Resources...

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    Chapter 15 - Resource markets
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    Economic Resources Resource Resource Payment land rent labor wages capital interest entrepreneurial ability profit
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    Economic Resources Rent, wages, and interest are  determined in the markets for land,  labor, and capital. Entrepreneurs, though, are residual  claimants who receive profits, the  revenue that is left over after all other  factors of production have been paid. 
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    Circular flow The demand for  resources is a  “derived demand.” Households are the  source of supply  and firms are the  source of demand in  resource markets.
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    Equilibrium in resource  markets
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    Resource demand Price elasticity of resource demand:
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    Determinants of price  elasticity of resource demand The price elasticity of demand for a  resource is expected to be higher when: the price elasticity of demand for the final 
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