Unit 3

Question 1

factor markets

Answer 1

Buying and selling of inputs (“factor” = “input”)

Question 2

derived demand

Answer 2

The demand for any input is called a “derived demand” because it is derived from the demand for the final product that the input is used to make.

Question 3

marginal physical product

Answer 3

The change to output resulting from the use of one additional unit of an input.

Question 4

marginal revenue product

Answer 4

The change to total revenue resulting from the use of one additional unit of an input.

Question 5

labor supply and demand curves

Question 6

nonpecuniary benefits

Question 7

compensating differentials

Question 8

economic rent

Question 9

cost (or productive) efficiency

Question 10

allocative efficiency

Question 11

marginal benefit

Question 12

total surplus

Question 13

deadweight loss

Question 14

externalities

Question 15

marginal social cost

Question 16

marginal social benefit

Question 17

corrective tax

Question 18

public good

Question 19

universal service regulation

Question 20

poverty line

Question 21

poverty rate

Question 22

social mobility

Question 23

Lorenz Curve

Question 24

Gini Coefficient

Question 25

progressive income tax

Question 26

regressive income tax

Question 27

proportional (or flat) tax

Question 28

marginal tax rate

Question 29

administrative burden

Question 30

tax burden

Question 31

excess burden

Question 32

tax incidence

Question 33

Laffer Curve

Question 34

Monopsony

Question 35

bilateral monopoly