(2.5) Resources
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.
