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Lecture Economics (6/e): Chapter 27 - Stephen L. Slavin-Kinh Te - Quan Ly

Chapter 27 - Demand in the factor market. The following will be discussed in this chapter: Derived demand, productivity, marginal revenue product, changes in resource demand, the substitution and output effects, optimum resource mix for the firm.

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Created date 8/30/2018 5:45:07 AM +00:00

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Chapter
27
Demand
in
the
Factor
Market
Copyright
2002 by The McGraw­Hill Companies, Inc.
All rights reserved.
27­1
Chapter
Objectives
•
Derived
demand
•
Productivity
•
Marginal
revenue
product
•
Changes
in
resource
demand
•
The
substitution
and
output
effects
•
Optimum
resource
mix
for
the
firm
Copyright
2002 by The McGraw­Hill Companies, Inc.
All rights reserved.
27­2
Derived
Demand
•
Derived
demand
is
the
demand
for
resources
•
There
are
four
resources:
land,
labor,
capital,
and
entrepreneurial
ability
•
The
demand
for
these
resources
is
derived
from
the
demand
for
the
final
products
–
The
demand for land on which to
grow corn is
derived from
the
demand for
corn
–
The
demand for labor with which to
produce
cars
is
derived from
the
demand for
cars
Copyright
2002 by The McGraw­Hill Companies, Inc.
All rights reserved.
27­3