AP Microeconomics Prd 4 A a Define Using Graphs Where Appropriate Key Terms and Concepts Relating to Factor Markets B Explain Using Graphs Where Questions

Connect labor, capital, and land to factor prices, then analyze derived demand, marginal revenue product, marginal factor cost, wages, employment, and economic rent.

Exam points

identify labor, land and physical capital as factors of production and match them to factor prices
explain why labor demand is derived from demand for the good or service workers produce
define or calculate marginal revenue product as the additional revenue from one more unit of a factor
define or calculate marginal factor cost as the change in total factor cost from one more input
draw labor demand and supply and identify the competitive-market equilibrium wage and employment

[Maximum number: 1]

RKB is a profit-maximizing monopoly that produces a new, patented electronic device. RKB is earning positive economic profit.

Assume that RKB hires workers in a perfectly competitive labor market.

Draw a correctly labeled graph for the labor market, showing the equilibrium wage and quantity of labor, labeled $\mathrm{W}_{\mathrm{E}}$ and $\mathrm{Q}_{\mathrm{E}}$ , respectively.

(i) Draw a correctly labeled graph of a perfectly competitive labor market with a downward-sloping demand (D) curve and an upward-sloping supply (S) curve and show the equilibrium wage and quantity of labor, labeled $\mathrm{W}_{\mathrm{E}}$ and $\mathrm{Q}_{\mathrm{E}}$ , respectively.

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AP Microeconomics Prd 4 A a Define Using Graphs Where Appropriate Key Terms and Concepts Relating to Factor Markets B Explain Using Graphs Where Questions question 1