krugmanwellsmodulesmicro3

Key Terms

Question

Derived demand

Factor distribution of income

Value of the marginal product

Value of the marginal product curve

Marginal productivity theory of income distribution

Equilibrium value of the marginal product

Compensating differentials

Unions

Efficiency-wage model

Time allocation

Leisure

Individual labor supply curve

Marginal revenue product of labor (MRPL)

Monopsony

Monopsonist

the additional value produced by the last unit of a factor employed in the factor market as a whole.

equals the marginal product of labor times the marginal revenue received from selling the additional output. The marginal revenue product of land and the marginal revenue product of capital are equivalent concepts.

the value of the additional output generated by employing one more unit of a given factor, such as labor.

the division of total income among land, labor, physical capital, and human capital.

a model in which some employers pay an above-equilibrium wage as an incentive for better performance.

for a factor results from (or is derived from) the demand for the output being produced.

a market in which there is only one buyer.

the decision about how many hours to spend on different activities, which leads to a decision about how much labor to supply.

a graphical representation showing how the quantity of labor supplied by an individual depends on that individual’s wage rate.

the time available for purposes other than earning money to buy marketed goods.

every factor of production is paid its equilibrium value of the marginal product.

wage differences across jobs that reflect the fact that some jobs are less pleasant or more dangerous than others.

organizations of workers that try to raise wages and improve working conditions for their members by bargaining collectively.

a graphical representation showing how the value of the marginal product of a factor depends on the quantity of the factor employed.

a single buyer in a market.