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FACTOR MARKET EQUILIBRIUM: Equilibrium in the factor market, which for a perfectly competitive market is achieved at the factor price and factor quantity give by the intersection of the factor demand curve and the factor supply curve. For factor markets that are not perfectly competitive, such as those controlled by monopoly or monopsony, factor market equilibrium is achieved when the controlling firm maximizes profit. For monopoly, this is the factor quantity that equates marginal revenue and marginal cost. For monopsony, this is the factor quantity that equates marginal revenue product with marginal factor cost. But regardless of marginal structure, as an equilibrium it is maintained until shocked by an external force.
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Lesson 3: Scarcity | Unit 2: Resources
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Page: 6 of 17
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We have limited resources. Limited resources can be free or scarce.- Scarce Resource. A resource is scarce if it can't produce all of the goods people want it to produce.
- Scarce resource and scarcity are related. Scarcity is the society-wide condition in which resources are limited related to all wants and needs. Scarce resource is the condition that applies to a specific resource.
- Free Resources. A resource is free if it can produce all of the goods people want it to produce and then some. We can have free resources, even though society faces the condition of scarcity.
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AGGREGATE SUPPLY The total (or aggregate) real production of final goods and services available in the domestic economy at a range of price levels, during a given time period. Aggregate supply, usually abbreviated AS, is two different relations between price level and real production--long run and short run. With long-run aggregate supply, prices and wages are flexible and all markets are in equilibrium. With short-run aggregate supply some prices and wage are NOT flexible and some markets are NOT in equilibrium. This is one half of the AS-AD (aggregate market) analysis. The other half is aggregate demand.
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Parker Brothers, the folks who produce the Monopoly board game, prints more Monopoly money each year than real currency printed by the U.S. government.
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"It's usually the last ounce of effort that tips the scales of success." -- Rick Beneteau
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ISIC
International Standard Industrial Classification
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