Chapter 18 - The Markets for the Factors of Production

output price

The ________ and technological change cause the labor- demand curve to shift.

competitive firm

A(n) ________ hires workers until the marginal product of labor's value is equal to the wage.

marginal contribution

Labor, land, and capital each earn the value of its ________ to the production process.

Technological change

________ doesn't benefit all workers.

theory of neoclassical theory of distribution

The ________ explains how labor, land, and capital are compensated for the roles they play in the production process.

curve of labor

The trade off can cause a backward bending supply ________.

Productivity

________ is key in acquiring a higher standard of living.

Capital

________: the equipment and structures used to produce goods and services.

substitution effect

A(n) ________ is when the higher wage increases the cost of leisure but reduces the demand for it.

Factors of production

________: the inputs used to produce goods and services.

income effect

The ________ and substitution effect is conflicting effects on someone's labor supply decision.

Production function

_________________: the relationship between the quantity of inputs used to make a good and the quantity of output of that good.

Marginal product of labor

______________: the increase in the amount of output from an additional unit of labor.

Diminishing marginal product

________________: the property whereby the marginal product of an input declines as the quantity of the input increases.