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Unit: Factor markets

AP Micro:
PRD (BI)
,
PRD‑4 (EU)

0

Possible mastery points
Level up on the above skills and collect up to 200 Mastery points
AP Micro:
PRD (BI)
,
PRD‑4 (EU)
,
PRD‑4.C (LO)
,
PRD‑4.C.1 (EK)
,
PRD‑4.C.2 (EK)
,
PRD‑4.C.3 (EK)
,
PRD‑4.C.4 (EK)
AP Micro:
PRD (BI)
,
PRD‑4 (EU)
,
PRD‑4.D (LO)
,
PRD‑4.D.1 (EK)
,
PRD‑4.D.2 (EK)
Level up on the above skills and collect up to 300 Mastery points
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Unit test

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About this unit

In this unit, we apply the concepts of supply and demand to markets for factors such as labor, capital, and land. We analyze the concept of derived demand, understand how a factor’s marginal product and the marginal revenue product affect the demand for the factor, and consider the role of factor prices in the allocation of scarce resources. By studying the determination of factor prices, we gain an understanding of how the market determines the distribution of income and the sources of income inequality in a market economy.
AP® is a registered trademark of the College Board, which has not reviewed this resource.