ECON Chapter 8 Notes.txt
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Define labor supply.
The willingness and ability to work specific amounts of time at alternative wage rates in a given time period.
Define opportunity cost.
The most desired goods and services that are forgone in order to obtain something else.
Define market supply of labor.
The total quantity of labor that workers are willing and able to supply at alternative wage rates in a given time period.
What is demand for labor.
The quantities of labor employers are willing and able to hire at alternative wage rates in a given time period.
What is derived demand?
The demand for labor and other factors of production resluts from the demand for final goods and services produced by theses factors.
Define marginal physical product mpp.
The change in total output associated with one additional unit of input.
Define Marginal revenue product MRP.
The change in total revenue associated with one additional unit of input.
What is the law of diminishing returns?
The marginal physical product of a variable input declines as more of it is employed with a given quantity of other fixed inputs.
What is the equilibrium wage?
The wage at which the quantity of labor supplied in a given time period equals the quantity of labor demanded.
Define opportunity wage.
The highest wage an individual would earn in his or her best alternative job.
What would you like to do?
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