Flashcards
13. Intro to Factors of Production
Cards in this deck (13)
- 1Define "supply price" of a factor.Minimum payment needed to bring it into use and keep it in that employment.
- 2Define "transfer earnings" of a factor.Earnings it must receive to stay in that employment.
- 3What is economic rent?The earnings in excess of supply price
(Producer surplus) - 4What 2 things are required to earn economic rent?Some monopoly power or inelasticity of supply.
- 5What is Quasi-Rent?Temporary economic rent
- 6What is a specific factor of production? Non-specific factor of production?One with no alternative uses (cash register)
Multiple uses (shop unit) - 7Can non-specific FoP make transfer earnings?Yes
- 8What type of demand is the demand for FoP?Derived Demand
- 9Explain Marginal Physical Product (MPP) of a FoPThe extra output produced because of
one unit of that factor - 10Explain Marginal Revenue Product (MRP) of a FoPThe extra revenue a firm gains because of one unit of that factor
- 11What law does MPP depend on?Law of Diminishing Marginal Returns.
- 12The demand curve of a factor is also...The MRP curve.
- 13In order to supply any good or service, a firm needs...Land, labour, capital and enterprise.
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- Leaving Cert Economics (Micro Flashcards) Flashcards on 13. Intro to Factors of Production, created by samstevenson2014 on 10/03/2015.
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