(2.5) Resources

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When firms want to produce additional output, they make decisions at the _____

margin

A production decision at the margin includes:

the decision to increase output.

The payment name for _____ is interest.

capital

The marginal revenue product equals the:

change in the total revenue divided by the change in the resource quantity.

The change in total product associated with hiring an additional worker is called:

marginal product.

The additional cost incurred as a result of utilizing one more unit of a variable resource is called the _____ _____ _____

marginal resource cost

Suppose that market conditions change in an area and, as a result, a firm faces a decrease in the cost of each additional worker it hires. In this case,:

the marginal revenue cost curve shifts downward.

When firms want to produce additional output, they make decisions:

A firm decides to hire an additional worker. A firm decides to produce additional output.

If the price of a resource increases, there is:

a decrease in the quantity of the resource demanded.

The marginal revenue product associated with hiring one additional worker is:

a downward-sloping line.

A decrease in resource demand is:

a shift to the left of the quantity demanded of the resource at every price.

Derived demand refers to:

a type of demand that is specific to resources.

The demand for labor is derived from the:

additional total revenue generated by hiring additional employees or purchasing additional resources.

The additional _____ incurred as a result of utilizing one more unit of a variable resource is called the marginal resource cost.

cost

The additional cost incurred as a result of utilizing one more unit of a variable resource is called the marginal resource:

cost.

All else equal, when the demand for the good or service a resource produces decreases, the demand for the resource used to produce it will:

decrease, shifting to the left.

The marginal revenue product curve also represents the resource _____ curve.

demand

When economists refer to resource demand being a derived demand, they mean that the demand for the resource:

depends on the demand for the goods and services produced by those resources.

If consumers develop a taste for sushi, there will be a(n) _____ demand for sushi chefs.

derived

The demand for labor is:

derived from its marginal revenue product.

If employees pay partially for higher resource costs, the marginal resource cost curve:

does not shift.

The marginal resource cost curve for the firm will not shift if:

employees fully pay for higher resource costs.

The marginal resource cost curve for the firm will shift if:

employers pay for part of or all higher resource costs.

_____ ability involves assuming risk and organizing resources into a productive process rather than using resources in production.

entrepreneurial

_____ ability is the talent or ability to combine land, labor, and capital to produce goods and services.

entrepreneurial

The payment name for _____ _____ is profits or losses.

entrepreneurial skills

The optimal level of resource utilization for a firm occurs where the marginal revenue product _____ the marginal resource cost.

equals

The optimal level of resource utilization _____ when the marginal resource cost increases.

falls

In the circular flow model, _____ and _____ interact in the resource market and the product market.

firms households

If the wage rate is constant, the marginal resource cost associated with hiring one additional worker is a(n) _____ line at the wage.

horizontal

Consider the demand for resource "A." All else equal, when the price of substitute resource "B" increases, the demand for resource "A" will:

increase, shifting to the right.

A firm tends to emphasize _____ revenue product when deciding how many workers to employ.

marginal

The additional output produced as a result of utilizing one more unit of a variable resource is the _____ product.

marginal

The cost of an additional unit of a resource, such as labor, is called the:

marginal resource cost.

The resource demand curve is represented by the:

marginal revenue product curve

Resource utilization and marginal resource costs move in _____ directions.

opposite

For firms operating in perfectly competitive markets, if the price of a product is constant, the marginal revenue product is equal to the marginal product times the _____.

price

The marginal revenue _____ represents the additional revenue generated from using an additional unit of a resource.

product

The payment name for entrepreneurial ability is _____.

profit

The payment name for land is _____

rent

In the circular-flow model, the two markets are the _____ market and the _____ market.

resource product

A firm should continue to hire workers so long as the:

revenue they generate exceeds or equals their cost.

The marginal product is the:

the additional output produced as a result of utilizing one more unit of a variable resource

A firm will purchase a resource if:

the benefit associated with the purchase is greater than or equal to its cost.

Suppose that market conditions change in an area and, as a result, a firm faces an increase in the cost of each additional worker it hires. In this case,:

the marginal revenue cost curve shifts upward.

In deciding how many workers a business should employ,:

the marginal revenue product is key.

When making hiring decisions, employers need to consider:

the productivity of their workers and the price of their products.

The amount of a good or service produced by all workers is called:

total product.


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