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Factor markets and income ditribution

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Factor markets and income ditribution

  1. 1. Productive resources or Factors of production Land Labor Capital Entrepreneur
  2. 2. Circular Flow labor Households Firms Households Households Wage Profit Goods & Services
  3. 3.  product price (Derived demand) factor productivity prices of other factors
  4. 4. A concept that describesthe amount of demand forlabor that an economy or firmis willing to employ at agiven point in time.
  5. 5.  MRP > MRC = additional man hour MRC > MRP = reduces man hour MRP = MRC = maximize profits

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