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27 Cards in this Set

  • Front
  • Back
Demand for resources considered a derived demand bc...
it's dep on the demand for the product
An increase in the demand for new houses (product) leads to a ___ in the demand for lumber (resource)
increase
Why is the resource demand curve downward sloping?
Substitutes
If resource prices are high, the product price will be ___ and ___ ppl will buy it.
high; fewer
-Consumers will purchase substitute products
Why do firms hire ppl?
bc that employee's marginal product (how much extra that person produces at work) adds to total production
In order to hire ppl...
MRP > MC
Firms should hire additional workers as long as the marginal revenue product of that worker ___ the cost to hire the additional worker
exceeds
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 ___.
MC
-MC = to their wage rate
Most accurate definition of worker's MRP is ____ of a firm from the addition of a worker
the change in total revenue
A firm should hire employees until...
MRP = MC
What is the relationship btw the supply of resources & wage rate?
-resource supply curve sloping upward
-higher wages increase quan supplied
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
increase; increase
Workers determine the ___ of labor while firms determine the ___ for labor
supply; demand
A plentiful supply of labor would cause wages to ___
lower
A ___ in the wages of computer technicians which will ___ additional technicians in the LR
increase; attract
An unexpected decrease in the demand for accountants will cause a future __ in the quan supplied of accountants? Why?
decrease; bc of lower wages
Why do wages differ?
1. Differences in Workers
2. Difference in jobs
Compensating for wage differentials/how much extra wage you will req for:
1. High risk jobs
2. Job in poor location
3. Jon w/bad environ factors (pollution)
Supply of workers for risky jobs is ___
less; shift to LEFT
Labor immobility:
-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
Unskilled labor is ___ available
more
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
higher
An increase in international trade w/countries where the supply of unskilled labor is plentiful would ___ demand for unskilled labor in this country
decrease
How can you increase productivity?
1. Increase nonhuman capital (more machines)
2. Improve ppls skill level (more education)
3. Advance technology (helps produce more)
Wages in the U.S. are higher than those in Mexico primarily bc output per worker is ___ in U.S.
higher; bc of machines
The real wages of workers will tend to be high when output per worker is ___.
high
The linkage btw high productivity & high earnings is vitally important bc:
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