Econ Chap 26

Front 1

Marginal Factor cost (mfc)

Back 1

addition to total cost when one additional unit of an output is employed

Front 2

marginal revenue product (mrp)

Back 2

addition to total revenue when one additional unit of an unput ( such as labor) is employed

Front 3

monopsony

Back 3

input buyer that faces a higher input price as it employs more inputs

Front 4

price taker and price searcher in output market

Back 4

a perfectly competitive firm can increase output and still sell it at the same price.

Front 5

price searcher in an input market

Back 5

employ only a small fraction of the total workforce- majority of a factor market are competitive.

Front 6

output effect

Back 6

when machines higher price raises the cost and price of output which in turn reduces output demand.

Front 7

substitution effect

Back 7

when labor and machinery are substitute then the firm to produce a given amount of output will use more labor and less machinery

Front 8

elastic by input demand

Back 8

finding the perfectage of labor demand go down when wages go up by 1 percent

%change in quantity of input demanded by % change in inputs price.

Front 9

marginal revenue product (MRP)

Back 9

is the additional total revenue due to employing an additional unit of an input

Front 10

marginal factor cost (MFC)

Back 10

is the additional to total cost due to employing an additional unit of an input

Front 11

the maximize profit of a firm is when

Back 11

by hiring until MRP=MFC

Front 12

for price takers

Back 12

MRP= P X MPP

Front 13

for a price searcher

Back 13

MRP = MR X MPP

Front 14

for a price taker

Back 14

MRP declines as the firm hires more because of diminishing MPP.

for a price searcher, MRP declines even more bc besides falling MPP, its MR also falls as it hires more

Front 15

for both price takers and price searchers

Back 15

the marginal revenue product schedule is the demand scheduele for the input

Front 16

facor shifting the derived demand for an input

Back 16

price of complementary input

price up - decrease

price down - increase

Front 17

the demand curve for an input is shifted by changes in the demand for output

Back 17

by changes in the price of other inputs

and by changes in productivity

Front 18

when inputs goes down more when its prices rises

Back 18

its demand is more elastic

Front 19

when the quantity of an input demanded is insensitive to price change

Back 19

its demand is inelastic

Front 20

a price searcher in its output market can be a price taker in its input marker

Back 20

n

Front 21

for price takers in the input market

Back 21

MFC= Price of Inputs

Front 22

for a price searcher in the input market

Back 22

MFC=Price of inputs plus added cost of paying higher wages to already inputs

Front 23

for the price searcher

Back 23

MFC> price of inputs

Front 24

when firms are price takers in both the market

Back 24

they sell in

and the markets they buy factors in

inputs will be allocated to their most valued use

Front 25

firms will hire inputs untill the marginal physical product of each per dollar cost is the same

Back 25

this will give it the most output for a given cost (and equivalently, the least cost for a given output)

Front 26

when all factors are paid

Back 26

their marginal value (p x MPP) total revenue will equal total costs in the long run

Front 27

the surplus of each factor will be the income of other factors

Back 27

and vice cersa