ECO 101 Chapter Notes - Chapter 18: Marginal Cost, Economic Equilibrium, Opportunity Cost

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7 Sep 2016

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Capital- the economy"s stock of equipment and structures. Factors of production- the inputs used to produce goods and services. The demand for a factor of production is a derived demand. Derived demand- a firm"s demand for a factor of production is derived from its decision to supply a good in another market. The basic tools of supply and demand apply to goods and to labor services. Firm is competitive (in both the market for the good and in the market for consumer of that good) The production function and the marginal product of labor. To make its hiring decision, the firm must consider how the size of its workforce affects the amount of output produced. 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 (mpl= delta q/ delta l)

Related Questions

If labor productivity increases,

Question 8 options:

the demand for labor increases.

labor costs rise by equal increments.

jobs will relocate.

some workers will be laid off.

In labor markets, the substitution effect occurs when

Question 10 options:

a change in the price of a substitute input reduces the cost of capital.

a change in the price of a substitute input causes the demand for labor to change in the same direction.

a substitute good also functions as a compliment.

the cost of production falls enough that the firm will produce a larger amount of output.

The demand for labor is

Question 6 options:

	derived from the satisfaction that hiring the inputs provides the owner or manager of the firm more money.
	totally unrelated to the demand curve for the final product.
	derived from the demand for the final product being produced.
	derived from a utility-maximizing process similar to that used to derive the demand curve for goods and services.