Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
Micro Chapter 17
| Question | Answer |
|---|---|
| Wages: | Price paid for labor Direct pay plus fringe benefits |
| Types of wages: | Nominal Wage Real Wage |
| Role of Productivity ___ ____ depends on productivity U.S. labor is highly productive: -plentiful ____ -Access to abundant ____ ____ | Labor demand depends on productivity. U.S. labor is highly productive: -Plentiful capital. -Access to abundant natural resources. |
| Is it a Competitive Labor Market | Purely competitive labor market |
| Market demand for labor: Sum of ___ demand | Sum of firm demand Example: carpenters |
| Market supply for labor: Competition among ____ | Upward sloping Competition among industries |
| Labor market equilibrium: | MRP = MRC rule |
| Monopsony | Employer has buying power (of workers/employees) |
| Monopsony Characteristics: | -Single buyer. -Labor immobile or lacking skills. (Ex: only store in town = only place to work unless you move) -Firm is a “wage maker.” |
| Monopsony Power: Maximize profit by hiring... | Maximize profit by hiring smaller number of workers. Examples of monopsony power: Nurses Professional athletes |
| 3 Types of Labor Union Models: | 1) Demand enhancement (unions that want an increased demand for their labor/higher wage) 2) Craft/exclusive (unions that reduce the supply of labor/want to keep number of workers low or 0. Only trained/capable workers should be given certain jobs) 3 |
| Effectively reduce supply of labor: (Craft/Exclusive Union Model) | Restrict immigration. Reduce child labor. Encourage compulsory retirement. Enforce a shorter workweek. |
| Are unions successful? | Wages are 15% higher on average than non-union wages |
| Consequences of unions: | Higher unemployment. Restricted ability to demand higher wages. |
| Bilateral Monopoly M_____ and inclusive ______ Single ____ and ____ of labor | Monopsony and inclusive unionism Single buyer and seller of labor quantity of labor that is hired is indeterminate Ex: Volkswagen employs 60,000 workers from a town of 120,000 people |
| The Minimum-Wage Controversy State and locally set ____ | Case against minimum wage Case for minimum wage State and locally set rates Evidence and conclusions |
| Wage Differentials: | Wage differences across occupations. |
| What explains wage differentials? | Marginal revenue productivity. Noncompeting groups. Human capital. Compensating wage differences. |
| Why don’t workers just move from lower-paying jobs to higher-paying jobs? | Workers are prevented from moving to higher paying jobs. Market imperfections: -Lack of job information. -Geographic immobility. -Unions and government restraints. -Discrimination. |
| Pay for performance: (The principal-agent problem) | offering an incentive for workers who work hard |
| Last Word: Occupational Licensing Nearly 1 in 3 jobs today require a ____ | Nearly 1 in 3 jobs today require a license. Restricts competition and increases price. Burden on consumers and workers. |
| Nominal wage: | how much your salary is (dollar amount) |
| Real wage: | What value your salary actually has (due to inflation, etc.) |
| Monopsony efficiency? | Productive and allocative inefficiency |
| Minimum Wage Pros vs Cons | Pros: -people need money to live Cons: -setting a wage above market equilibrium price: if a firm has to pay more to each worker, then they will hire less workers |
| Human Capital | knowledge and skills that we have that allow us to do a job well |
Created by:
Phillies55
Popular Economics sets