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27 Cards in this Set
- Front
- Back
Demand for resources considered a derived demand bc...
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it's dep on the demand for the product
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An increase in the demand for new houses (product) leads to a ___ in the demand for lumber (resource)
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increase
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Why is the resource demand curve downward sloping?
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Substitutes
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If resource prices are high, the product price will be ___ and ___ ppl will buy it.
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high; fewer
-Consumers will purchase substitute products |
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Why do firms hire ppl?
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bc that employee's marginal product (how much extra that person produces at work) adds to total production
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In order to hire ppl...
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MRP > MC
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Firms should hire additional workers as long as the marginal revenue product of that worker ___ the cost to hire the additional worker
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exceeds
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A profit-maximizing restaurant owner will hire more buspersons to keep more table clean & quickly available to new customers, as long as the MRP of buspersons exceeds their ___.
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MC
-MC = to their wage rate |
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Most accurate definition of worker's MRP is ____ of a firm from the addition of a worker
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the change in total revenue
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A firm should hire employees until...
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MRP = MC
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What is the relationship btw the supply of resources & wage rate?
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-resource supply curve sloping upward
-higher wages increase quan supplied |
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An increase in the demand for a resource will ___ price of the resource, and ___incentive of potential suppliers to provide the resource in the future
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increase; increase
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Workers determine the ___ of labor while firms determine the ___ for labor
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supply; demand
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A plentiful supply of labor would cause wages to ___
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lower
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A ___ in the wages of computer technicians which will ___ additional technicians in the LR
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increase; attract
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An unexpected decrease in the demand for accountants will cause a future __ in the quan supplied of accountants? Why?
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decrease; bc of lower wages
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Why do wages differ?
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1. Differences in Workers
2. Difference in jobs |
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Compensating for wage differentials/how much extra wage you will req for:
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1. High risk jobs
2. Job in poor location 3. Jon w/bad environ factors (pollution) |
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Supply of workers for risky jobs is ___
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less; shift to LEFT
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Labor immobility:
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-costly to move to a new location or train for a new occupation in order to get a job
Ex: difficult to become a doctor, so they will get paid more |
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Unskilled labor is ___ available
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more
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An indiv who possesses a specialized skill that's difficult to execute will receive a ___ wage ONLY when the skill is in great demand relative to its supply
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higher
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An increase in international trade w/countries where the supply of unskilled labor is plentiful would ___ demand for unskilled labor in this country
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decrease
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How can you increase productivity?
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1. Increase nonhuman capital (more machines)
2. Improve ppls skill level (more education) 3. Advance technology (helps produce more) |
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Wages in the U.S. are higher than those in Mexico primarily bc output per worker is ___ in U.S.
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higher; bc of machines
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The real wages of workers will tend to be high when output per worker is ___.
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high
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The linkage btw high productivity & high earnings is vitally important bc:
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1. Provides indivs w/strong incentive to dev skills & engage in activities that others val highly
2. High productivity (lrger output per hr per wker) is key to high living stnd 3. Brings self-interest of indivs into harmony w/econ progress |