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ADVERSE SELECTION: When a negotiation between two people with different amounts of information, that is, asymmetric information, restricts the quality of the good traded. This typically happens because the person with more information is able to negotiate a favorable exchange. This is frequently referred to as the "market for lemons."

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Lesson 22: Factor Supply | Unit 1: Background Page: 2 of 25

Topic: Factor Payments <=PAGE BACK | PAGE NEXT=>

  • The factor payments:

  • Factor payments are the wage, interest, rent, and profit payments to the owners labor, capital, land, and entrepreneurship, in return for the use of the productive services.
  • A few more details about the four factor payments:

    • Wage: This is a payment to the owner of labor in exchange for the productive service of labor.

    • Interest: This is a payment to the owner of capital in exchange for the productive services of capital.

    • Rent: This is a payment to the owner of land in exchange for the productive services of land.

    • Profit: This is a payment to the owner of entrepreneurship in exchange for the productive services of entrepreneurship.


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INJECTIONS

Non-consumption expenditures on aggregate production. The three aggregate expenditures grouped under the heading of injections are investment expenditures, government purchases and exports. Injections add to the core circular flow containing consumption, production, and income. The injections-leakages model is a Keynesian economics analysis that combines injections with leakages (saving, taxes, and imports) to identify the equilibrium level of aggregate production and income.

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APLS

BROWN PRAGMATOX
[What's This?]

Today, you are likely to spend a great deal of time at a flea market hoping to buy either a coffee cup commemorating the 2000 Olympics or a birthday gift for your grandmother. Be on the lookout for crowded shopping malls.
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This isn't me! What am I?

Mark Twain said "I wonder how much it would take to buy soap buble if there was only one in the world."
"Far and away the best prize that life has to offer is the chance to work hard at work worth doing."

-- Theodore Roosevelt, 26th US president

MPS
Marginal Propensity to Save
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