econ labor second quiz

some wages differences are can be attributed to human capital

wage discrimination

another name for minimum wage

wage floor

real wages vary for workers depending on

wage trends(location, part time, etc)

discrimination can be interpreted as

a leftward shit in the labor demand curve

human capital

a person's accumulated knowledge and skills

monopsy

a situation to which there is a single buyer of a particular good or service in a given market

price-rate system

a system by which workers are paid a specific amount per unit they produce

industrial union

a union organized within a given industry, whose members come from a variety of occupations

price rate systems are common in

agriculture

with compensating differentials

workers may seek out riskier jobs in order to be paid more

the same supply curve may slope upward for some range of wages and

downward for another range

an individual has to make decisions between working and acquiring human capital through

education and training

the cost of acquiring human capital is

forgone wages

an investment in college education raises the amount of

human capital

through restrictions unions shift the supply curve to the

left

alternatives to work are called

leisure

the price of leisure is the opportunity cost of

not working, the wage

wages can be thought of as

price of the alternative activity(home or leisure)

In the labor market

the higher the wage, the less attractive leisure will seem to work

the labor market model also predicts that the equilibrium wage equals

the marginal revenue product of labor employed at a firm increases

union workers make

more money by 15 percent

you should invest in human capital if

returns are greater than costs

the difference between temporary and permanent changes helps explain

the dramatic decline in the average hours worked per week in the US as wages have risen over the last century- more permanent change with income effect

labor productivity differences are the underlying reason for

wage differences

labor union

a coalition of workers organized to improve the wages and working conditions of the members

investment

a decision to spend funds or time on something now because it pays off in the future

compensating wage differential

a difference in wages for people with similar skills based on some characteristic of the job such as riskiness, discomfort, or inconvenience of the time scheduele

economists view the education and training that raise skills and productivity as

a form of investment

the substitution effect says

a higher price for a good will make that good less attractive to purchase relative to alternatives

empirical studies show that the quantity of labor supplied rises more in response to

a temporary increase in the wage than to a permanent increase

craft union

a union organized to represent a single occupation whose members come from a variety of industries

when a person is deciding how much to work we need to consider

alternatives to work

deferred payment contract

an agreement between a worker and an employer whereby the worker is paid less than the marginal revenue product when young, and subsequently paid more than the marginal revenue product when old

the decision to invest in human capital can be approached like

any other economic choice

the decision to consume more leisure works like to the decision to consume

any other good

wage differentials are an important source of differences in wages that are not

based on marginal product

method by which unions raise wages

by communicating with management, motivating worker, and using democracy

comporable worth porposals can cause

change for compensated workers, surpluses, and shortages

income effect

changes in price of a good either reduce(if a price increase) or expand(if a price decrease) your ability to buy all goods, including leisure

the differences between whites and blacks are not closing as

closely

competition among firms may reduce

discrimination

if a firm has market power discrimination can still

exist

benefit of human capital is the

extra wages one can earn using the knowledge and skills accumulated from going to school or receiving on-the job training

signaling and human capital both role in explaining

higher wages of college grads

leisure activities include

homework, talking on the phone, going bowling, hiking

the skills of a worker depend partly on

how much schooling and training the worker has had

price rate systems are used for

incentives or when managers cannot observe the worker carefully

the quantity of labor supplied tends to decrease, when wage rises because of

income effect

the labor market model predicts that wages in the United States should

increase when labor productivity increases

The decision about whether to work and how much to work depends on

individual circumstances

the sensitivity of the quantity supplied to the wage

is probably small for most workers. but economists say could be large so it is useful to distinguish supply curves

The market labor supply curve

is the sum of many people's individual labor supply curves

as more parents have to potential workers

it has become a household decision

the point of intersection where the quantity of labor supplied equals the quantity of labor demanded is

labor market equilibrium

risky jobs cons

less social interactions and dangerous

the frequencey of buying and selling labor is

long term

labor unions raise wages by incresing

marginal product

labor productivity is a good indication of trends in the

marginal product of labor on average in the US

if the marginal product of labor increases with additional skills from investment in human capital then

on average wages for people with a college education should be higher than those for people without a college education

wages can be thought of as price of the alternative activity because

opportunity cost of allocating an hour to that activity is the forgone wage that could have been earned from work.

labor productivity

output per hours of work

comporable worth proposals

people who propose laws for equal pay from discrimination

suply and demand model is a model of

reality NOT REALITY ITSELF

the labor market model predicts that the firm's labor demand curve will

shift to the right as the firm will be willing to hire more workers at any given wage

a college degree -- to an employer that they are skilled

signals

impact of minimum wage depends on

skill

although human capital differences explain some of the wage dispersion

some people have argued that it is not skill of college students but because they are screened

changes in wages have both a -- and -- effect on the labor supply

substitution and income

the income effect works in opposite direction from

substitution effect

the decision to work can be analyzed with the concepts of

substitution effect and income effect

unions raise wages by restricting

supply

labor unions play a role in the

supply and demand model

An individual's labor supply curve is derived from

that person's decision about whether to work and how much to work at different wage rates

on-the-job training

the holding of the skills of a firm's employees while they work for the firm

The labor supply curve slopes downward if

the income effect dominates(as the wage rises, individuals work less can earn more money by working fewer hours)

if the marginal product of labor rose for an economy as a whole

the labor demand curve for the economy should shift to the right and both the equilibrium quantity of labor and the equilibrium wage should also rise

labor productivity has been large since

the mid 1990's

hazardous duty pay is common in

the military

an individual's labor supply curve can be viewed as

the outcome of choice between work and some other activity, whether home work or leisure

if a person's marginal benefit from more leisure is greater than wage

the person will choose more leisure

backward bending labor supply curve

the situation in which the income effect outweighs the substitution effect of an increase in the wage at higher higher levels of income, causing the labor supply curve to to bend back and take on a negative slope

labor market equilibrium

the situation in which the quantity of labor supplied equals the quantity of labor demanded

bilateral monopoly

the situation in which there is one buyer and one seller in a market

the quantity of labor supplied tends to increase when the wage rises because of

the substitution effect

the labor supply curve can slope either upward or downward because

the substitution effect and income effect work in opposite directions

The supply curve slopes upward if

the substitution effect dominates(individuals work more because price of leisure goes up)

wage differences are discrimination if

the wage differences cannot be explained by differences in marginal or other factors unrelated to raced or gender.

productivity differences are an explanation for

the wage gap between workers who do not receive education beyond high school and those who are college educated

the model for the labor market predicts

the wage in the labor market will be at the intersection of the supply and demand curves

minimum wage is a cause for

unemployment of less skilled workers

the price of leisure is the

wage

the decision to obtain working skills is much like the choice between

work and leisure