MGEB06H3 Chapter : Week 2 chapter notes

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lavenderdonkey6

6 Dec 2010

School

UTSC

Department

Economics for Management Studies

Course

MGEB06H3

Professor

Jack Parkinson

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Document Summary

Chapter 3 national income: where it comes from and where it goes notes. N an economy"s output of goods and services its gdp depends on (1) its quantity of inputs, called the factors of product, and (2) its ability to turn inputs into output, as represented by the production function. N mathematically, a production function has constant returns to scale if: zy = f (zk, zl) for any positive number z. N y = f (fixed k, fixed l) = fixed y. Profit = pf(k, l) wl rk. N www. notesolution. com competitive firm takes product price and factor prices as given and chooses amounts of labour and capital that maximize profit. N marginal product of labour (mpl) the amount of extra output produced when the labour input is increased by one unit. Mpl = f (k, l + 1) f (k, l)

Related Questions

In the circular flow diagram, in the markets for

a. The factors of production, households are sellers and firms are buyers.

b. The factors of production, households and firms are both buyers

c. Goods and services, households and firms are both sellers.

d. Goods and services, households are sellers and firms are buyers.

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In the circular flow diagram, in the markets for

a. Goods and services, households are buyers and firms are sellers.

b. The factors of production, households are buyers and firms are sellers.

c. The factors of production households and firms are both buyers.

d. Goods and services, households and firms are both sellers.

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14. The factor market can best be described as, where __________. a. Families buy goods and services. b. Firms buy goods and services. c. Firms buy the services of labor, land and capital. d. The government sells goods and services.

15.Investment in the US is financed through __________. a. Private savings, surpluses in the government budget, and borrowing from the rest of the world. b. Private savings, deficits in the government budget, and borrowing from the rest of the world. c. Private lending, deficits in the government budget, and lending to the rest of the world. d. Private savings and borrowing from the rest of the world.

16. In the Circular Flow Model, goods and services produced by business firms are sold on __________. a.. The goods market b. In the factor market c. In the labor market d. In the financial market

17. If we import more than we export from the rest of the world, we __________. a.. We must borrow an equal amount from the rest of the world. b. We can lend an equal amount to the rest of the world. c. We have a surplus. d. We are helping to finance the investment of the rest of the world.

18. The Circular Flow Model shows that the family sector earns its income __________. a. Selling factors of production. b. Buying factors of production. c. Selling goods and services. d. Selling financial assets

MGEB06H3 Chapter : Week 2 chapter notes

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