AP Microeconomics Flashcards: Changes In Factor Demand And Supply

What this deck covers

This deck focuses on Changes In Factor Demand And Supply, giving you a quick way to review the definitions, rules, and examples that matter most for AP Microeconomics.

How to use these flashcards

Work through these flashcards in short sessions. Try to answer each prompt before flipping the card, then revisit any cards you miss until the explanation feels automatic.

Flashcard 1: What effect does a technological advancement have on factor demand?

Answer: It increases the demand for that factor. Technology improves productivity, raising MRP.

Flashcard 2: What is the effect of an increase in factor productivity on factor demand?

Answer: It increases factor demand. Higher productivity raises MRP and factor demand.

Flashcard 3: What happens to factor supply when working conditions improve?

Answer: Factor supply increases. Better conditions attract more workers to supply.

Flashcard 4: Identify a factor that can increase the supply of labor.

Answer: Increased immigration policies. Immigration increases available labor force.

Flashcard 5: Which factor causes an increase in factor supply?

Answer: An increase in the number of suppliers. More suppliers increase market availability.

Flashcard 6: What causes an increase in the demand for a factor of production?

Answer: An increase in the demand for the product it helps produce. Factor demand is derived from product demand.

Flashcard 7: State the formula for the marginal revenue product (MRP).

Answer: $MRP = MR \times MP$. MRP equals marginal revenue times marginal product.

Flashcard 8: Identify the effect on labor supply if retirement age is postponed.

Answer: Labor supply increases. Delayed retirement keeps workers in labor force.

Flashcard 9: What happens to factor demand when productivity increases?

Answer: Factor demand increases. Higher productivity increases MRP and demand.

Flashcard 10: Identify one factor that can cause a decrease in factor supply.

Answer: A natural disaster affecting resource availability. Natural disasters reduce factor availability.

Flashcard 11: Identify a factor that can increase the supply of labor.

Answer: Increased immigration policies. Immigration increases available labor force.

Flashcard 12: What is the effect of a decrease in interest rates on capital supply?

Answer: Capital supply increases. Lower interest rates reduce capital costs.

Flashcard 13: How does an increase in consumer demand for a product affect factor demand?

Answer: It increases factor demand. Higher product demand increases derived factor demand.

Flashcard 14: Find the impact on factor demand when the price of output increases.

Answer: Factor demand increases. Higher output prices increase MRP and factor demand.

Flashcard 15: What effect does a decrease in technology costs have on factor demand?

Answer: Factor demand increases. Cheaper technology increases its demand as factor.

Flashcard 16: What happens to factor demand if the price of a substitute factor falls?

Answer: Factor demand decreases. Cheaper substitutes reduce demand for original factor.

Flashcard 17: What effect does an increase in factor price have on factor demand?

Answer: It decreases factor demand. Higher prices reduce quantity demanded via law of demand.

Flashcard 18: What is the effect of improved training programs on factor supply?

Answer: It increases factor supply. Training improves worker skills and availability.

Flashcard 19: Which factor causes an increase in factor supply?

Answer: An increase in the number of suppliers. More suppliers increase market availability.

Flashcard 20: What effect does a technological advancement have on factor demand?

Answer: It increases the demand for that factor. Technology improves productivity, raising MRP.

Flashcard 21: What is the effect of a decrease in taxes on factor supply?

Answer: Factor supply increases. Lower taxes increase net returns to suppliers.

Flashcard 22: Identify the impact of an increase in the price of raw materials on factor demand.

Answer: Factor demand decreases. Higher input costs reduce profitability and factor demand.

Flashcard 23: Identify the impact of a recession on factor demand.

Answer: Factor demand decreases. Recessions reduce output demand and factor needs.

Flashcard 24: What happens to factor supply if there is a tax on production?

Answer: Factor supply decreases. Production taxes increase costs, reducing supply.

Flashcard 25: What occurs when the cost of a complementary factor decreases?

Answer: Factor demand increases. Cheaper complements increase demand for both factors.

Flashcard 26: What happens to factor demand when there is a decrease in the demand for the product?

Answer: Factor demand decreases. Factor demand derives from product demand.

Flashcard 27: Identify the impact of an increase in the number of firms on factor demand.

Answer: Factor demand increases. More firms create greater total factor demand.

Flashcard 28: How does an increase in consumer demand for a product affect factor demand?

Answer: It increases factor demand. Higher product demand increases derived factor demand.

Flashcard 29: What happens to factor supply if there is a reduction in regulatory barriers?

Answer: Factor supply increases. Reduced barriers lower entry costs for suppliers.

Flashcard 30: What happens to factor demand if the price of a substitute factor falls?

Answer: Factor demand decreases. Cheaper substitutes reduce demand for original factor.

Flashcard 31: What effect does a decrease in transportation costs have on factor supply?

Answer: Factor supply increases. Lower transport costs make factors more accessible.

Flashcard 32: Identify the effect of unionization on factor demand.

Answer: It can decrease factor demand. Unions may increase wages, reducing quantity demanded.

Flashcard 33: What effect does a government subsidy have on factor supply?

Answer: It increases factor supply. Subsidies lower production costs, encouraging supply.

Flashcard 34: Find the impact on factor supply when wages increase due to a shortage.

Answer: Factor supply increases. Higher wages attract more factor suppliers.

Flashcard 35: What happens to labor supply if there are more part-time job opportunities?

Answer: Labor supply increases. Part-time options attract more workers to market.

Flashcard 36: Identify one factor that can cause a decrease in factor supply.

Answer: A natural disaster affecting resource availability. Natural disasters reduce factor availability.

Flashcard 37: Identify the impact of a recession on factor demand.

Answer: Factor demand decreases. Recessions reduce output demand and factor needs.

Flashcard 38: State the formula for the marginal revenue product (MRP).

Answer: $MRP = MR \times MP$. MRP equals marginal revenue times marginal product.

Flashcard 39: Which factor can decrease the demand for labor?

Answer: Automation or technology replacing labor. Technology substitutes for human workers.

Flashcard 40: Which factor can increase the demand for skilled labor?

Answer: Advancements in technology requiring new skills. Technology advances create demand for new skills.

Flashcard 41: How does a decrease in the cost of capital affect labor demand?

Answer: Labor demand might decrease. Cheaper capital substitutes for labor input.

Flashcard 42: What is the effect of improved training programs on factor supply?

Answer: It increases factor supply. Training improves worker skills and availability.

Flashcard 43: What is the impact on factor supply if education levels increase?

Answer: Factor supply increases. Education improves worker productivity and availability.