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Definition
| where demand for one good or service occurs as a result of demand for another. |
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| is the extra output produced by one more unit of an input |
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Definition
| is the change in total revenue earned by a firm that results from employing one more unit of labor. It is a neoclassical model that determines, under some conditions, the optimal number of workers to employ at an exogenously determined market wage rate. |
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Definition
| Marginal costs are the costs a company incurs in producing one additional unit of a good. |
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Definition
| It will be profitable for a firm to produce up to the point at which that resource's MRP is equal to its MRC |
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Definition
| The link between personal preferences, consumption, and the demand curve is one of the most complex relations in economics. Implicitly, economists assume that anything purchased will be consumed, unless the purchase is for a productive activity. |
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| elasticity of resource demand |
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Definition
| lasticity of Resource Demand refers to the relative change of resource demand caused by changes in resource price. |
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Term
| least-cost combination of resources |
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Definition
| The optimal combination of resources is achieved through cost-minimization and profit-maximization. |
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| profit-maximizing combination of resources |
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Definition
| In competitive markets, a firm will realize the most profit maximizing combination when each input is employed up to the point at which its price equals its marginal revenue product: |
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Term
| marginal productivity theory of income distribution |
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Definition
| Economic concept that demand for labor is determined by its marginal productivity, and the wage rates are determined by the value of the marginal product of labor. Also called marginal productivity theory of income distribution. |
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