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5 terms

29. The Labor Market: Demand, Supply, and Outsourcing

Economics Today Chapter 29
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Marginal Physical Product (MPP) of Labor
The change in output resulting from the addition of one more worker. The MPP of the worker equals the change in total output accounted for by hiring the worker, holding all other factors of production constant.
Marginal Revenue Product (MRP)
The marginal physical product (MPP) times marginal revenue (MR). the MRP gives the additional revenue obtained from a one-unit change in labor input.
Marginal Factor Cost (MFC)
The cost of using an additional unit of an input. For example, if a firm can hire all the workers it wants at the going wage rate, the marginal factor cost of labor is the wage rate.
Derived Demand
Input factor demand derived from demand for the final product being produced.
Outsourcing
A firm's employment of labor outside the country in which the firm is located.