Supa Economic-Chapters 7, 9, 10 Review

Variables that impact the demand for labor

-technology -price of complements and substitutes -price of good/services being produced

Impacts on supply of labor

-wealth -alternate opportunities -preferences -transfer payments

Does minimum wage help or hurt the people and businesses in our economy?

This helps people because it regulates how much people can get paid without hurting the economy since minimum wage is usually not too much. It also helps because more people will want to work than can be hired. However, It can hurt because if businesses do not want to pay that, they must lay workers off.

Elasticity of Workers

a worker with a higher education or special skill is harder to replace

Naturally Occurring Market Power

being able to dominate an industry because of skills, traits, or personality someone has -not permanent

Labor Enhancing

creates jobs for someone

Public Goods

goods funded by state and federal taxes and belong to everyone

Private Goods

goods that are both excludable and rival in consumption

Rent Maintenance

having market power and attempting to keep it

Rent Seeking

not having market power but doing things to try and gain it

Monopsonies

one buyer of a product -can control the price since only buyer

Negative Externality

one persons business/action is having a negative impact on others

Monopoly

one seller of a product

How come people in market economies earn different wages?

people may be making more than others based on skill systems. it can also be based on how long you have been at a place

Free Rider Problem

people reaping the benefits of someone but doing noting to contribute to the cause

Non-Interventionist

people who believe in a more laissez-faire economy and want the government to stay out of it

Interventionist

people who want the government to be more involved in the economy

Human Capital Investment

spending on training and education which allows workers to be able to produce more output in the future

Labor Saving

takes jobs away from a person

Derived Demand

the demand for the worker comes from the product/service that worker produces

Risk Externality

when a person/business acts in a way that puts others at risk

Demand for Labor

when businesses demand workers -inverse relationship between the wage & amount of workers -downward slope

Artificially Created Market Power

when society has just handed a person or business their control -can last forever

Subsidy

A government payment that supports a business or market

Positive Externality

a benefit received by someone who had nothing to do with the activity that generated the benefit

The Supply of Labor

an individual desires to work

Factor Market

the market that deals with buying and selling factors of production