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AS-AD MODEL: An economic model relating the price level and real production that is used to analyze business cycles, gross domestic product, unemployment, inflation, stabilization policies, and related macroeconomic phenomena. The AS-AD model, inspired by the standard market model, captures the interaction between aggregate demand (the buyers) and short-run and long-run aggregate supply (the sellers).
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Lesson 21: Factor Demand | Unit 3: The Curve
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Page: 16 of 24
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In this unit, you should have learned about:- The marginal revenue product schedule, which presents the relation between marginal revenue product, marginal physical product, and the quantity of input.
- How the marginal revenue product is derived from the marginal revenue product schedule.
- That the marginal revenue product curve is negatively-sloped due to the law of diminishing marginal returns.
- The hiring decision by a firm is based on a comparison between marginal revenue product and the wage.
- How the factor demand curve can be derived from the marginal revenue product curve.
- That the factor demand curve is negatively-sloped due to the law of diminishing marginal returns.
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MARGINAL REVENUE PRODUCT CURVE A curve that graphically illustrates the relation between marginal revenue product and the quantity of the variable input, holding all other inputs fixed. This curve indicates the incremental change in total revenue for incremental changes in the variable input. The marginal revenue product curve plays a key role in marginal productivity theory and the economic analysis of factor markets.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time at a dollar discount store hoping to buy either a how-to book on fine dining or a coffee cup commemorating the first day of winter. 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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Paper money used by the Commonwealth of Massachusetts prior to the U.S. Revolutionary War, which was issued against the dictates of Britain, was designed by patriot and silversmith, Paul Revere.
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"Old age isn't so bad when you consider the alternative. " -- Cato, Roman orator
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CEEC
Council for European Economic Cooperation
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