Unit 4 : MicroeconomicsNational Council on Economic EducationVisual 4.1Big Ideas about Factor, or Resource,Markets1. The economic concepts are similar to those for product markets.2. The demand for a factor of production is derived from the demand for the good or service produced from this resource.3. A firm tries to hire additional units of a resource up to the point where the resource’s marginal revenue product (MRP) is equal to its marginal resource cost (MRC).4. In hiring labor, a perfectly competitive firm will do best if it hires up to the point where MRP = the wage rate.Wages are the marginal resource cost of labor.5. If you want a high wage:(A) Make something people will pay a lot for.(B) Work for a highly productive firm.(C) Be in relatively short supply.(D) Invest in your human capital.6. Real wages depend on productivity.7. Productivity depends on real or physical capital, human capital, labor quality and technology.