Explain to the class the marginal productivity theory of resource demand and why businesses care about it. i. State the assumptions ii. Explain MRP and MRC, and the firms' rule for employing resources iii. Be sure to explain the terms and what they mean to a business.

c. Explain the determinants of resource demand.

i. Discuss the 3 determinants of resource demand

1. Changes in product demand

2. Changes in productivity

a. Quantities of other resources

b. Technological advance

c. Quality of the variable resources

3. Changes in the prices of other resources including:

a. The case of substitute resources - the substitution effect and the output effect

b. The case of compliments