Chapter 10 input demand the labor and land markets

Chapter 10 input demand the labor and land markets -...

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Derived demand: the demand for resources that is dependent on the demand for the outputs those resources can produce Productivity of an input: the amount of output produced per unit of that input Marginal product of labor: the additional output produced by 1 additional unit of labor Marginal revenue of labor: the additional revenue a firm earns by employing 1 additional unit of input Marginal revenue product: the additional revenue a firm earns by employing 1 additional unit of input Factor substitution effect: the tendency of firms to substitute away from a factor whose price is has risen and toward a factor whose price has fallen Output effect of a factor price increase: when a firm decreases its output in response to a factor price
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Unformatted text preview: increase this decreases its demand for all factors Demand determined price: 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 Pure rent: the return to any factor of production that is in fixed supply Technological change: the introduction of new methods of production or new products intended to increase the productivity of existing inputs or to raise marginal products Chapter 10: input demand: the labor and land markets Monday, October 03, 2011 2:59 PM Econ 2106 Page 1...
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