69: Introduction and Factor Demand

Question 1

factor of production

Answer 1

resource used by firms to produce goods and services that are consumed by households

Question 2

physical capital

Answer 2

manufactured equipment and resources

Question 3

human capital

Answer 3

improved labor from education, knowledge

Question 4

derived demand

Answer 4

demand for the factor comes from the demand for the firm’s output

Question 5

how labor contributes to income

Answer 5

wages and salaries

Question 6

how capital contributes to income

Answer 6

profits from stocks

Question 7

how land contributes to income

Answer 7

profits from renting out land or buildings

Question 8

how enterprise contributes to income

Answer 8

profits from entrepreneurial success

Question 9

factor distribution of income

Answer 9

division of total income among land, labor, capital, and enterprise

Question 10

marginal cost of worker in perfect comp

Answer 10

wage rate

Question 11

marginal product of labor

Answer 11

additional output each marginal worker can produce

Question 12

value of the marginal product of labor

Answer 12

VMPL = P x MPL

Question 13

individual firm’s demand curve in perfect comp

Answer 13

VMPL

Question 14

causes of shifts to factor demand curve (3)

Answer 14

changes in price of produce, supply of other factors, tech