c



c 



 c

Ê








Ô










 
c 



6 The demand for productive resources.
6 Productivity - the most productive
resources have highest demand.
6 Prices of factor substitutes and
complementary resources affect the
demand for productive resources.
 

 
 
6 The quantity demanded has inverse
relationship with wage rates.
6 Marginal product of labor ² is the additional
output produced by the employment of an
additional man-
man-hour of labor.
6 Marginal revenue product of labor ² the
additional revenue obtained by selling the
marginal product of labor.
6 Marginal resource cost ² the payment of
additional man-
man-hour
hour--labor and other
productive resources like land and capital.
 
 
 c 

6  
Ô


6  
Ô


6  


   
c 



6 
 !"" #$%
!&'$()
 
 

 


  c

6 &

6 &!%&

6 *+
   c


6 &
!$($&

6 $&
!$($&
 c
  c

 


6 ntelligenceand talents.
6 Education and training.

6 Unpleasant and risky jobs.

6 Ownership of productive factors.

6 Luck and connections

     c


There are several theories of income
distribution based in the following:

6 Marginal productivity
6 Needs

6 Social usefulness
6 Equality
 c   c

-refers to payments of the factors

of production.
   c
 
º

º


6 ºage ² the most important price of

productive resources.

6 Realwages ² refer to the number of

goods and services that a worker can
buy with his money wage ² his nominal
income.
 

 º




6 Supply and demand

6 Minimum wage

6 Labor unions
 c
c 
6 neconomics, rent is the payment for
the use of land and other natural
resources which are completely fixed in
total supply.

6 Accordingto Adam Smith

Smith,, rent was a a
monopoly price.
 ,

,
-

-
.
.

$$&&'!$$%&#%!!
! )
  

6 tis the payment for using the money
of other individuals.

6 Usury ² the imposition of unreasonably

high interest rate on loans.

6 Loansharks or usurers ² those who

charge extremely high interest rates.
  
6 Economic or Pure Profits ² earnings of firm
after deducting the cost of production, which
includes explicit cost and implicit cost.
6 Explicit cost ² actual expenditures if firm.

6 mplicit cost ² payments to productive

resources owned and self-
self-employed by a firm.
6 Normal profit ² the minimum payment for the
entrepreneur as a factor of production.