Studied by 2 people
Factors of Production
land, labor, and physical capital
Interest
payment for physical capital
Production Function
relationship between labor quantity and output
Law of Diminishing Marginal Returns
increasing, decreasing, negative marginal product phases
Marginal Revenue Product (MRP)
MRP = Marginal Revenue × Marginal Product
Firm's Demand for Labor
quantity of labor a firm hires at a wage rate
Market Demand for Labor
sum of each firm's marginal revenue product
Market Supply of Labor
quantity of labor households supply at a wage rate
Equilibrium Wage and Quantity
point where supply and demand curves intersect
Firms in Perfectly Competitive Factor Markets
many buyers, market sets wage
Marginal Resource Cost (MRC)
cost to hire one more worker
Monopsony
market with one buyer of a resource
Least Cost Combinations of Resources
finding optimal resource combination
Note 
Flashcard (175)