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AEA: The abbreviation for, the American Economic Association, an organization of over 25,000 professional economists. Founded in 1885, this premier top-of-the-economic-association-list publishes the prestigious American Economic Review, arguably THE number one scholarly U.S. economic journal and the Journal of Economic Literature, arguably THE number one index of economic journal publications. The AEA, as acronymically inclined economists call it, also sponsors an annual conference where professional economists present scholarly papers on their latest scholarly research.
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Lesson 21: Factor Demand | Unit 2: Derived Demand
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Page: 9 of 24
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Topic:
Marginal Productivity Theory
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- The marginal productivity theory.
- Marginal productivity theory states that the demand for a resource or factor of production is based on the marginal (physical) product of the resource input and the marginal revenue of the output produced.
- A definition...again:
- Factor demand depends on the quantity output an input can produce and the value of that output.
- In particular, factor demand depends on two marginals:
- The productivity of the factor.
- The revenue generated from production.
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DECREASING MARGINAL RETURNS In the short-run production of a firm, an increase in the variable input results in a decrease in the marginal product of the variable input. Decreasing marginal returns typically surface after the first few quantities of a variable input are added to a fixed input. This is one of two types of marginal returns. The other is increasing marginal returns. A related phenomenon is diseconomies of scale associated with long-run production.
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BROWN PRAGMATOX
[What's This?]
Today, you are likely to spend a great deal of time lost in your local discount super center trying to buy either a box of multi-colored, plastic paper clips or several orange mixing bowls. Be on the lookout for telephone calls from long-lost relatives.
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Much of the $15 million used by the United States to finance the Louisiana Purchase from France was borrowed from European banks.
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"Concentrate all your thoughts upon the work at hand. The sun's rays do not burn until brought to a focus." -- Alexander Graham Bell, inventor
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WE
Walrasian Equilibrium
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