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FACTOR DEMAND ELASTICITY: The elasticity of a factor demand curve is affected by four things: (1) the price elasticity of demand for the good produced, (2) the production function technology and elasticity of marginal physical product, (3) the ease of factor substitutability, and (4) the share of the factor's cost relative to total cost. Changes in any of these four items can cause the price elasticity of factor demand to change. In other words, the quantity of factor services demanded will become more or less sensitive to changes in the factor price.
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Lesson 14: Production | Unit 1: Short-Run Production
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Page: 5 of 25
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In this unit, you should have learned about:- Production as the transformation of inputs into outputs an the central role it plays in market supply.
- The difference between fixed inputs, which can not be changed during the period of analysis, and variable inputs, which can be changed.
- Why the standard view is capital as the fixed input and labor as the variable input.
- How fixed and variable inputs are related to the short run and long run.
- Why firms are considered to operate in the short run and long run simultaneously.
- Two alternative production time periods -- market period, in which all inputs and the output is fixed, and very long run, in which all inputs including social institutions and technology beyond the control of the firm are variable.
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PER UNIT TAX A tax specified as a percentage of the quantity of a good, service, asset, or other activity. Per unit taxes are often imposed on specific goods or markets. A common per unit tax is that levied on gasoline. People pay a given tax for each gallon of gasoline purchased, regardless of the price of gasoline. An alternative is an ad valorem tax, with is a tax specified as a percentage of the value or price of a good.
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GRAY SKITTERY
[What's This?]
Today, you are likely to spend a great deal of time flipping through mail order catalogs hoping to buy either a birthday greeting card for your grandmother or a coffee cup commemorating yesterday. Be on the lookout for rusty deck screws.
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On a typical day, the United States Mint produces over $1 million worth of dimes.
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"Courage is the ladder on which all the other virtues mount." -- Claire Boothe Luce, diplomat, writer
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Osaka Securities Exchange (Japan)
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