Factor Markets (2000 # 2)

This video lesson is from the 2000 AP Microeconomics Exam. This video is designed for students to practice the question to enhance their content knowledge on factor markets, and as a resource for teachers to use in their classroom. There is no audio in this video lesson, just a continuous video of the questions and answers. The overall objective is for students to pause the video, answer the questions, and play the video to see if they get the questions correct. This is where teachers can explain why the answer is correct to their students if needed. I hope you find this video lesson helpful. This question was principally aimed at finding the firm's profit-maximizing level of employment and assessing whether the firm was earning an economic profit. The first parts of the question tested whether the student realized that the firm, being a price taker and a wage taker, was operating in a competitive output market and in a competitive input market. Some students were not able to apply the input-hiring rule of employing an input as long as the marginal revenue product of the input exceeded the marginal factor cost of the input (or the wage rate). Also, students too frequently confused an economic profit with a normal profit.