Chaper+18+-+Micro

=**Chapter 18 - Markets for the Factors of Production**=

Factors of Production: the inputs used to produce goods and services
 * Land
 * Labor
 * Capital

Labor market is also governed by the supply and demand
 * Demand for Labor**
 * The Competitive Profit-Maximizing Firm**
 * The firm is a competitive firm in both the labor market and the market of its products, thus are price takers of both fields.
 * Firm's supply of apples and its demand for workers are derived from its primary goal of maximizing profit.
 * The Production Function and the Marginal Product of Labor**
 * When making the decision to hire people, firms consider how the size of the work force affects the output (**Production Function**).
 * They also consider the **Marginal Product of Labor** (the increase in the amount of output from an additional unit of labor)
 * They also consider the **Diminishing Marginal Product** (the property whereby the marginal product of an input declines as the quantity of the input increases)
 * Value of the Marginal Product**: the marginal product of an input times the price of the output

ASDF


 * Summery:**

Questions: Answers:
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