(ECON) Chapter 11
A & B
Human capital is the __________. A - experience that people derive from spending more time on a job. B - skills and knowledge that people obtain by furthering their schooling. C - physical capital that humans are equipped with on their jobs.
labor
___ is the major factor of production.
value of marginal product of labor (VMPL)
how much each worker contributes to revenue; the contribution of an additional worker to a firm's revenue
statistical discrimination
discrimination that arises due to expectations about a group of people
land
includes the solid surface of the earth and natural resources
marginal cost
marginal revenue = ___
supply
the labor-leisure trade-off determines the ___ of labor because an increase in the wage rate is an increase in the opportunity cost of leisure, and can therefore be expected to reduce the amount of leisure one wishes to consume. Choosing less leisure is equivalent to supplying more labor, thus yielding a positive relationship between the wage rate and the amount of labor supplied.
compensating wage differentials
wage premiums paid to attract workers to otherwise undesirable occupations
human capital, compensation wages, discrimination in the job market
what are the reasons for differences in wages in the workplace?
price of the good the firm produces, technology used in production
what factors would shift the labor demand curve?
A
A friend tells you that he thinks that the salespeople who work at Apple stores are paid very low wages, given their productivity. Dividing Apple's revenues by the total number of employees shows that each employee contributed an average of $473,000 in revenues in 2011. But most of Apple's sales staff are paid about $25,000 a year. What is the flaw, if any, in your friend's reasoning? A - The wage is equal to the value of the worker's marginal product, not revenue per worker. B - The wage is equal to profit per worker, not revenue per worker. C - The wage is based on a competitive rate schedule, which is determined by the market, not revenue per worker. D - There is no flaw in his or her reasoning; this demonstrates the Law of Diminishing Returns.
A, C, D
How does the market for inputs like labor differ from the market for goods and services? (Check all that apply.) A - The demand for inputs is derived from the demand for final goods and services. B - The market for inputs resolves shortages and surpluses through government-supervised negotiations. C - Firms are buyers in the market for inputs, while individuals are buyers in the market for goods and services. D - Firms are sellers in the market for goods and services, while individuals are sellers in the market for inputs.
A
In a competitive labor market, the profit-maximizing number of workers that a firm will hire occurs where the ____________. A - value of marginal product of labor is equal to the market wage. B - marginal product of labor equals zero. C - marginal product of labor stops increasing. D - marginal product of labor is equal to the market wage.
wage differential
Some people think it's unfair that celebrities like Jimmy Fallon earn a lot more than people who add so much more value to society, like teachers. What do you think explains this ___? --- The economic output of celebrities like Jimmy Fallon adds more economic value to firms than those services provided by teachers.
D
Which of the following is not an important determinant of wage inequality within an economy? A - Discrimination in the job market. B - Differences in compensating wages. C - Differences in human capital. D - Differences in connections to influential people.
derived, more
___ demand is the demand a firm has for the factors of production that enable it to produce output that is sold in product markets. --- Suppose the demand for economics courses at your school increases, all else constant. In this case, the school's administrators will seek to hire ___ economics instructors.
labor-complementary technologies
a type of technology that complements existing labor inputs, increasing the marginal product of labor
labor-saving technology
a type of technology that substitutes for existing labor inputs, reducing the marginal product of labor
taste-based discrimination
discrimination that arises due to people's prejudices against a group of people
human capital
each person's stock of skills to produce output or economic value
value of marginal product of capital (VMPK)
how much each additional unit of capital contributes to the firm's revenues; the contribution of an additional unit of physical capital to a firm's revenues
profit
in order to maximize ___ you need to consider how much you're producing and how many workers you have.
derived demand
means most workers are to produce a good or service to be sold to a consumer
breaking the glass ceiling
reaching beyond what is expected and the expectations of others
rental price
the cost of using the good for some specific period of time
population changes, worker preference changes, opportunity cost
what factors would shift the labor supply curve?
A
Compensating wages are the wage premiums ___________. A - paid to attract workers to occupations to otherwise undesirable jobs. B - union workers receive relative to nonunion workers. C - public-sector workers receive compared to private-sector workers. D - college-educated workers receive for enduring four (or more) years of college.
suppliers, demanders
in the labor market, consumers are the ___ of labor and the firms are the ___ of labor.
skill-biased technological changes
increase the productivity of skilled workers relative to that of unskilled workers
