ECON 102 Midterm 4 Study Guide: Factors of Production and Monopoly

A series of flashcards covering key concepts related to factors of production and monopoly from the study guide.

Factors of Production

The three main inputs in the production of goods and services: Labor, Physical Capital, and Land.

Derived Demand

The demand for labor is based on the demand for the goods and services produced.

Marginal Product of Labor (MPL)

The additional output produced by one more unit of labor.

Value of Marginal Product of Labor (VMPL)

The monetary value of the MPL, calculated as MPL multiplied by the price of output.

Labor Supply Curve

A graphical representation showing the relationship between labor supply and wage rates.

Wage Inequality

Differences in wages due to various factors including human capital, compensating wage differentials, and discrimination.

Physical Capital

Tools, machinery, and equipment used in the production process.

Compensating Wage Differentials

Wage premiums paid for jobs that are considered risky or undesirable.

Taste-Based Discrimination

Bias against a group of individuals in the labor market based on personal prejudice.

Monopolist

A market participant that has the power to set prices due to lack of competition.

Barriers to Entry

Obstacles that prevent new competitors from easily entering a market.

Deadweight Loss

The loss of economic efficiency when the equilibrium for a good or service is not achieved.

Price Discrimination

Charging different prices to different consumers or for different units of a good.

Natural Monopoly

A type of monopoly that arises when a single firm can supply the entire market at a lower cost than two or more firms.

Antitrust Policies

Regulations designed to promote competition and prevent monopolistic practices.

Socially Optimal Price

The price level at which the price equals the marginal cost.