Economics: Factors of Production

What is supply price

the minimum amount of money needed to bring a fop into production

What is quasi rent

Money earned on a temp. basis

What is Economic rent

Any money earned above the supply price

What is transfer earnings

Minimum amount of money needed to keep a FOP in production

what is the return for land

Rent

name the 4 types of land

agricultural recreational commercial residential

what is land

land is anything provided by nature that aids the production process

What is enterprise

enterprise is the fop that brings all the other fop’s together in the hopes of making a profit

What is the return for enterprise

Return for rent is residual, can vary and can be negative

What is Capital

Capital is any machinery that aids the production process

what is the return for capital

the return for capital is interest

explain mec

MEC or marginal efficiency of capital is any extra profit earned by employing an additional unit of capital

Explain Capital Widening vs Deepening

Capital widening is increasing the total stock of capital at the same rate as labour while deepening is increasing the total stock of capital at a higher rate then labour

Name the 4 types of capital

Social Capital - Roads Hospitals

Working Capital - Engine of a car

Fixed Capital- Equipment and tools

Private Capital - Company Computer

What is Labour

any man made effort that aids the production process

what is the return for labour

wages

define MRP and MPP

MRP = Marginal revenue product - the additonal revenue earned by employing a additional unit of labour

MPP = Marginal Physical Product - the additonal product produced by emplouying an additional unit of labour

define geo and occupational mobility of labour

Geographical - is the moving of location

occupational - is the moving of occupation

your doing great!

I know thanks

explain the backwards bending supply curve

at some point the addional quality of labour starts to diminish due to additonal income having less value then free time