Chapter 13 - Factor Markets

Marginal analysis

is a more direct method of determining the number of workers required to optimize a company's profit.

marginal productivity theory

The term refers to the income distribution about payments to factors when goods markets and factor markets are perfectly competitive.

RCapital

is the equilibrium capital rental rate, and QCapital is the equilibrium quantity of capital utilized in production.

marginal revenue

The product curve, and hence the individual firm's demand curves for land and capital, slope downward owing to declining returns, just as they do for labor.

land tax

Although a(n) makes sense in terms of efficiency, there is no agreement on the level of taxes that is fair to landowners.

marginal revenue

The term refers to the product curve of a factor that shows how the product of that factor depends on the quantity of the factor employed.