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FACTOR MARKET, EFFICIENCY: A factor market achieves efficiency in the allocation of resources by equating marginal revenue product to factor price. Perfect competition, as the efficiency benchmark, is the only market structure to satisfy this criterion and achieve factor market efficiency. Monopsony, oligopsony, and monopsonistic competition are inefficient because they equate marginal revenue product to marginal factor cost, both of which are greater than factor price.
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Lesson 8: Market Shocks | Unit 2: Determinants
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Page: 5 of 20
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Five basic demand determinants:- Income: For a normal good an increase in income means an increase in demand. For an inferior good an increase in income means a decrease in demand.
- Tastes: If people want more of a good, then demand increases.
- Prices of other goods: A higher price of a substitute good means an increase in demand. A higher price of a complement good means an decrease in demand.
- Buyer's expectations: If buyers expect higher prices tomorrow, they increase demand today.
- Number of buyers: More buyers mean more demand.
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COMPENSATION OF EMPLOYEES The official item in the National Income and Product Accounts maintained by the Bureau of Economics Analysis measuring wages earned by the household sector for supplying labor services. This is one of five official factor payments making up national income. The other four are net interest, rental income of persons, corporate profits, and proprietors' income. Compensation of employees is far and away the largest of the five factor payments, typically running about 70 percent of national income.
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GRAY SKITTERY
[What's This?]
Today, you are likely to spend a great deal of time flipping through the yellow pages looking to buy either a set of luggage without wheels or a how-to book on wine tasting. Be on the lookout for letters from the Internal Revenue Service.
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This isn't me! What am I?
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John Maynard Keynes was born the same year Karl Marx died.
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"You don't have to see the top of the staircase to take the first step.¾ " -- Martin Luther King, civil rights leader
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FHLBB
Federal Home Loan Bank Board
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