Ch12 vocab - of that factor employed in the factor market...

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Alex Yang Goetz-2 Economics IB SL1 22 November 2009 Chapter 12 Vocabulary 1. Physical capital- referred to as “capital”; consists of manufactured resources such as buildings and machines 2. Human capital- the improvement in labor created by education and knowledge that is embodied in the workforce 3. Factor distribution of income- the division of total income among labor, land, and capital 4. Value of the marginal product- the value of the additional output generated by employing one more unit of that factor 5. Value of the marginal product curve- a curve that shows how the value of the marginal product of that factor depends on the quantity of the factor employed 6. Rental rate (land or capital)- the cost, implicit or explicit, of using a unit of that asset for a given period of time 7. Equilibrium value of the marginal product- the additional value produced by the last unit
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Unformatted text preview: of that factor employed in the factor market as a whole 8. Marginal productivity theory of income distribution- Every factor of production is paid its equilibrium value of the marginal product 9. Compensating differentials- wage differences across jobs that reflect the fact that some jobs are less pleasant than others 10. Unions- organizations of workers that try to raise wages and improve working conditions for their members 11. Efficiency wage model- some employers pay an above equilibrium wage as an incentive for better performance 12. Time allocation- How many hours to spend on different activities 13. Leisure- Time available for purposes other than earning money to buy marketed goods 14. Individual labor supply curve- a curve that shows how the quantity of labor supplied by an individual depends on that individuals wage rate...
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