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	Factor price - Wikipedia, the free encyclopedia
		Factor prices are the prices that the factors of production of a finished item attract.
		Classical and Marxist economists argued that the factor prices decided the value of a product and so value was intrinsic within the product.
		Marginalist economists argue that the price of factors is a function of the demand of the final product, and so they are imputed from the finished product.
	en.wikipedia.org /wiki/Factor_price (136 words)

	International Economics Glossary: F
		The degree to which a factor of production, such as labor or capital, is able to move, either among industries or between countries, in response to differences in its factor price, thus tending to eliminate such differences.
		A curve in factor space showing the minimum combinations of factor prices consistent with absence of profit in producing one or more goods, given their prices.
		In anti-dumping cases, the price to which the export price is compared, which is either the price charged in the exporter's own domestic market or some measure of their cost, both adjusted to include any transportation cost and tariff needed to enter the importing country's market.
	www-personal.umich.edu /~alandear/glossary/f.html (2666 words)

	Divergences and Social Factor Prices
		Ideal conditions for the calculation of social factor prices arise when empirical estimates of factor demand and supply curves are available for each industry in the economy.
		If factors are mobile between regions, integration of the factor market is possible and factor prices in one area may be linked to factor prices in another area.
		The factor price effect of a divergence in one commodity market would be offset by the factor price effect of a divergence in another output of opposite factor intensity.
	www.stanford.edu /group/FRI/indonesia/documents/pambook/Output/chap73.html (3026 words)

	Factor Mobility
		Factor Price Equalization: Although factor are immobile between countries, free trade of commodities will equalize factor prices under certain conditions, i.e., w = w* and r = r, in which case there are no incentives for factors* to move between countries.
		In a world of many commodities and factors, free commodity trade may reduce the gap in factor prices between countries, but factor prices may not be completely equalized.
		Thus, factor mobility does not enhance the world output in the region where factor prices are equalized..
	www.econ.iastate.edu /classes/econ355/choi/mob.htm (1790 words)

	[No title]
		A solution for output, world prices, and scarcity rents is optimal in that it requires the fewest factor inputs (valued in the factor prices of the regions employing the factors) for the world as a whole among all feasible scenarios, including the no-trade case.
		Thus the proposition states that factor use is lowest in the one-region world model, is greater with region-specific technologies and factors and the benefit-to-trade constraint of the Generalized Trade Model, and is greater still in the absence of trade.
		The amount of factor use is the scalar $\sum_{i=1}^m {\pi_i}'F_ix_i$, where the quantities of factors used in region $i$, the $k$-vector $F_i x_i$, are weighted by the region's factor prices, the $k$-vector $\pi_i$.
	www.math.uchicago.edu /~moon/econ/round3/sec3.insert (1018 words)

	International Trade and Factor Mobility
		Factors will move out of the cotton into the steel industry, but since cotton is labor-intensive and steel is capital-intensive, at constant factor prices the production shift creates an excess supply of labor and an excess demand for capital.
		Factor proportions in steel and cotton are given by the slopes of OP and O'P, respectively.
		Relative factor returns in A and B move in opposite directions, so the price changes in A which stimulate a capital movement are reinforced by the price changes in B.
	www.columbia.edu /~ram15/ie/ie-06.html (5238 words)

	[No title]
		In the latter model, the world is treated as a single compound region in that all regions'’ factors are pooled; that is, production takes place in the regions whose technologies are chosen and they are able to use, at their factor prices, factors that may originate in other regions.
		The equality of factor payments with the value of final deliveries for region $i$ \eqref{A3} is derived by transposing the $i^{\rm th}$ matrix equation in \eqref{A2}, multiplying through by the vector of output, $x_i$, and substituting from \eqref{A1}.
		The dual \eqref{C2} solution includes (besides world prices and region-specific factor scarcity rents) a vector of shadow prices, $\alpha_i$, corresponding to the last $m$ inequalities in the primal, that determine a benefit-of-trade rent and assure that world prices are high enough to accommodate this rent.
	www.math.uchicago.edu /~moon/econ/sec2.insert (987 words)

	But for, as if, and so what
		Let us suppose in particular that the changes in factor supplies are such that the total income of the economy measured at initial factor prices remains unchanged - i.e., that the market value of the unskilled labor subtracted equals the market value of the skilled labor added.
		The factor content approach makes it clear, however, that all of these elasticities matter only insofar as they affect the aggregate elasticity of substitution between factors, and thus that sensitivity analysis can be undertaken simply by considering the plausible range of values for that aggregate elasticity.
		And surely it remains true that if you change factor endowments, and the vector of changes is small (by whatever metric) relative to the initial vector, you would not expect large changes in factor prices, Cobb-Douglas or not.
	web.mit.edu /krugman/www/xperi.html (2323 words)

	Chapter 60 - The Heckscher-Ohlin (Factor Proportions) Model
		Similarly, in the labor-abundant country the price of the labor-intensive good would be bid down relative to the price of that good in the capital-abundant country.
		when the prices of the output goods are equalized between countries, as when countries move to free trade, then the prices of the factors (capital and labor) will also be equalized between countries.
		In a perfectly competitive market factors are paid on the basis of the value of their marginal productivity which in turn depends upon the output prices of the goods.
	internationalecon.com /v1.0/ch60/60c010.html (2647 words)

	Imputation
		In economics, the theory of imputation, first expounded by Friedrich von Wieser, maintains that factor prices are determined by output prices.
		Marginalist economists such as Carl Menger and the Austrian School maintained that value was not made up of the factors that made up a good; instead, it was made up of the most valuable use that the last good could be put to—the marginal utility of the finished good.
		It was these people whose marginal utility decided the factor prices, and their products were valued on their marginal utility to the end users.
	www.brainyencyclopedia.com /encyclopedia/i/im/imputation.html (262 words)

	The Cost Function
		is precisely the demand for the factor i at factor prices w and output level y.
		in the margin, the effect of a rise in price of factor j on the demand for factor i is the same as the effect of a rise in the price of factor i on the demand for factor j.
		This, of course, is precisely the "rule of the outermost" that is traced by the factor price frontier.
	cepa.newschool.edu /het/essays/product/cost.htm (6868 words)

	Production function -- Facts, Info, and Encyclopedia article (Site not responding. Last check: 2007-10-09)
		In particular it shows the maximum possible amount of output that can be produced per unit of time with all combinations of factor inputs, given current factor endowments and the state of available technology.
		In the long run all factor inputs are variable at the discresion of management.
		Further, the slope of the iso-product curve helps determine relative factor prices, but the curve cannot be constructed (and its slope measured) unless the prices are known beforehand.
	www.absoluteastronomy.com /encyclopedia/p/pr/production_function.htm (1689 words)

	Chapter 9—Production: Particular Factor Prices and Productive Incomes
		The price for the general uses, 0C, will be the same as the prices 0E, etc., for any particular use, since the price of the factor must, in equilibrium, be the same in all uses.
		The prices of land factors will be determined by the general schedule of the factors’ DMVPs and will be set according to the point of intersection of the total quantity, or stock, of the factor available, with its discounted marginal value productivity schedule.
		The MVP is determined directly by the degree that a factor unit serves the consumers, and the discount is determined by the extent that consumers choose saving-investment as against present consumption.
	www.mises.org /rothbard/mes/chap9a.asp (6965 words)

	International Economics Glossary: Edgeworth Box
		If factor prices are those given by the common tangent, as they must be for both goods to be produced, then the cost-minimizing techniques of production in the two industries are at the two points of tangency.
		Therefore, factor prices outside the cone are not given by the common tangent, but rather by the slope of the operating industry's isoquant at the factor ratio of the country's endowment.
		The case shown is an increase in the price of good X. The price increase pulls the unit-value isoquant for X in toward the origin.
	www-personal.umich.edu /~alandear/glossary/figs/Box/box.html (1197 words)

	The Wald System
		Heuristically, imagine three price locii in a two-dimensional factor returns space: it is highly improbable that all three price locii will intersect at a single point.
		Proof: As x* and w* are the equilibrium outputs and factor prices, then by definition of equilibrium we must have it that pD(p, w) = wv by the aggregation of the consumer budget constraints.
		The purpose of the Lemma was to demonstrate that once we know the equilibrium prices p, we know by extension that the equilibrium outputs x and factor prices w* will be solutions to the linear programming problem with p* given.
	homepage.newschool.edu /het/essays/get/waldsys.htm (5339 words)

	The Walras-Cassel System
		General equilibrium is defined as a set of factor prices and output prices such that the relevant quantities demanded and supplied in each market are equal to each other, i.e.
		Note that supply of factors F(p, w) on the left is upward-sloping with respect to factor prices w, while demand for outputs D(p, w) on the right is downward-sloping with respect to output prices p.
		The elasticities of factor supply and output demand curves reflect the impact of prices and wages on household utility-maximizing decisions.
	cepa.newschool.edu /het/essays/get/walcass.htm (4735 words)

	[No title]
		Is the bias related to the previous factor price changes?ó ¨Definition of Bias¨•In labor saving case holding factor prices constant Biases can be defined in factor share terms in the many factor case.
		The coefficients () on the share equations were estimated from historical data Then calculate the effects on the individual factor shares from the factor prices.
		In spite of increasing prices of machinery the machinery share was still increasing.
	www.agecon.purdue.edu /academic/agec643/class6/class6.ppt (395 words)

	Chapter 9—Production: Particular Factor Prices and Productive Incomes (continued)
		If we take the broader view of the economist, however, the various “costs,” i.e., prices of factors, determined by their various DMVPs in alternative uses, are ultimately determined solely by consumers’ demand for all uses.
		But this general law is by sections superseded by the phenomenon that not all factors of production are perfectly divisible and that, as far as they can be divided, they are not divisible in such a way that full utilization of one of them results in full utilization of the other imperfectly divisible factors.
		But the factors that influence his decision are too numerous and their interactions too complex to be captured in cost-curve diagrams.
	www.mises.org /rothbard/mes/chap9b.asp (7661 words)

	[No title] (Site not responding. Last check: 2007-10-09)
		Yet, the factor price equalization theorem suggests an important policy alternative:Allow free trade in outputs, specialize in labor-intensive production, and export labor indirectly in the form of labor-intensive goods.
		Thus, the short-run effects of (free) trade may not be the same long-run effects explained by Stolper-Samuelson and factor price equalization theorem.
		Price = Value of Marginal Product of Capital (The demand for capital originates from this equation.)ðÿ¢ ðp £ð<@g¿¿Àÿðz Vî ð“¨An increase in the price (of a good) would make demand for the input used in the production (of that good) increase (shift).
	www.oswego.edu /~atri/Eco344-Lec/FactorPrices.ppt (829 words)

	Paul Anthony Samuelson, Biography: The Concise Encyclopedia of Economics: Library of Economics and Liberty
		In a 1938 article Samuelson introduced the concept of "revealed preference." His goal was to be able to tell by observing a consumer's choices whether he or she was better off after a change in prices.
		Swedish economist Bertil Ohlin had argued that international trade would tend to equalize the prices of factors of production.
		The theorem he proved is called the Factor Price Equalization Theorem.
	www.econlib.org /library/Enc/bios/Samuelson.html (1024 words)

	SSRN-Factor Prices and the Factor Content of Trade Revisited: What's the Use? by Alan Deardorff (Site not responding. Last check: 2007-10-09)
		This paper examines the usefulness of a result of Deardorff and Staiger (1988), who showed that the factor content of trade can be interpreted under certain assumptions as indicating the nature of the factor price adjustments that can, in a specified sense, be attributed to that trade.
		Whereas without noncompeting imports, trade itself is analogous, in terms of its effects on factor markets, to a change in factor endowments equal to the factor content of trade, with noncompeting imports trade has an additional effect analogous to a Hicks-neutral technological improvement enabling those noncompeting imports to be produced competitively.
		Deardorff, Alan V., "Factor Prices and the Factor Content of Trade Revisited: What's the Use?" (August 8, 1997).
	papers.ssrn.com /sol3/papers.cfm?abstract_id=93729 (380 words)

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		Abstract: In a competitive constant-returns small open economy world prices are the appropriate shadow prices for traded goods in public sector cost-benefit analysis.
		If there are at least as many factors of production as there are goods produced and traded, it is straightforward to derive 'foreign-exchange-equivalent' factor shadow prices.
		Bertrand (American Economic Review, 1979) has argued that the case of more goods being produced and traded than there are factors (referred to as 'diversification' below) is of greater empirical relevance, and that in this case it is impossible to define factor shadow prices.
	www.cepr.org /home/cite.asp?Type=DP&Item=42 (198 words)

	International Trade Theory and Policy Analysis - Course Syllabus 1 (Site not responding. Last check: 2007-10-09)
		The immobile factor model introduces a realistic issue (factor immobility) into the Ricadian model and shows that trade may cause a redistribution of income, with some individuals winning and others losing.
		The session presents the H-O theorem which predicts the pattern of trade, notes the redistributive welfare effects of trade because of the changes in factor prices, discusses the factor-price equalization theorem and notes the importance of the compensation principle.
		This model is then used to demonstrate the price effects of a tariff in large and small country cases.
	internationalecon.com /v1.0/tradesyllabus1.html (1304 words)

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	Real Wages and Relative Factor Prices in the Third World 1820-1940: The Mediterranean Basin by Jeffrey G. Williamson ... (Site not responding. Last check: 2007-10-09)
		Real Wages and Relative Factor Prices in the Third World 1820-1940: The Mediterranean Basin by Jeffrey G. Williamson Harvard University
		9.1%: Real Wages and Relative Factor Prices in the Third..
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	gunther.smeal.psu.edu /38007.html (359 words)

	List of References, hypercommunication.net (Site not responding. Last check: 2007-10-09)
		Bernstein, Jeffrey I.; Sappington, David E.M. "Setting the X Factor in Price Cap Regulation Plans." The Journal of Regulatory Economics, 16:1 (June 1999):5-25.
		"Pricing Under Section 251 of the 1996 Telecommunications Act." Washington, DC: FCC CCB.
		Hayami, Yujiro; Ruttan, Vernon W. "Factor Prices and Technical Change in Agricultural Development: The United States and Japan, 1880-1960." Journal of Political Economy, 78(September-October): 1115-1141, 1970.
	www.hypercommunication.net /webrefs.html (8268 words)

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