Labor Econ Final Exam Material
Goods intensive commodities
Activities that require large amounts of goods and little time
Labor Participation Rate equation
Actual labor force/potential labor force x 100
Why does the supply curve for labor have a positive slope?
As the price increases the quantity also increases
T/ F The study of U.S. Labor economics is only affected by global or international factors
False
T/F Becker's model has nothing to do with the allocation of time in regards to labor market particiption
False
T/F IF the nationwide demand for workers in a given sector significantly goes up, then wages for nurses will, overall tend to go down
False
T/F If the overall national economy is growing quickly jobs become in lower demand by businesses
False
T/F The best way for a business or firm to increase its profits is to increase costs and decrease the prices for the goods or services they sell
False
T/F The higher the relative costs of labor the more labor a firm will usually hire
False
T/F When a worker is more productive it means that worker provides more cost per unit output to his company is going up
False
T/F Workers always prefer to choose new jobs in an industry sector which is considered a sundown industry
False
T/F Workers in any given sector of the economy, tend to migrate to geographical areas or locations in their state or country where wages overall are lower
False
T/F Along an indifference Curve workers have very different levels of utility
False- you are as happy at one point as you are at another
Becker Model of Allocation of Time
Helps understand the work-leisure decision and labor force participation rates and implications
In an economic boom, what is the labor demand?
High demand for labor, but the quantity of labor is less than the demand
Gary Becker's "goals" or main "initiatives for individuals and households in the economy" in general
Households are little factories that allocate time between time labor, production, and consumption
Undocumented persons
Individuals who unlawfully immigrate to the US usually to look for work
In an economic recession, what is the labor demand?
Low demand for labor, but the quantity of labor is high
What is a tight labor market?
More jobs are available than workers who are looking for jobs
Old vs New Labor Economics
Old- not a lot of choice New- workers get more choices and freedom
Example of goods intensive commodities
Picking up groceries curbside
Economies of scale
Savings in cost by an increased level of output
Skilled vs Unskilled
Skilled- Higher education resulting in higher pay Unskilled- Low education resulting in lower pay
Example of time intensive commodities
Sleeping or stargazing
Sunset industries vs sunrise industries
Sunset industries- industries that are slowing down or dying Sunrise industries- up and coming industries
T/F A supply curve has a positive slope
True
T/F Adding more education or training in a given labor field or sector is a big part of a person investing in their overall human capital
True
T/F If a business is able to reduce or cut the wages of their workforce per unit of production, then assuming sales stay the same price for a product, profits for the company will go up
True
T/F Labor is considered an input in a business production process
True
T/F Wages tend to fall during recessions but rise in economic expansions
True
T/F Workers seek the highest wages possible, whereas businesses want to hire at the lowest wages possible
True
Why does the demand curve for labor have a negative slope
When the price increases the quantity demanded decreases
Example of captial investment
You decide to enter the workforce straight out of high school instead of attending college to earn money and on-the-job training
Zones of production
a firm chooses to operate to produce output when an increase of labor increases efficiency
Time stress for the workforce
a lack of time to do desired activities
The Law of Diminishing Marginal Returns
as you have more of an object, the utility per each added unit decreases
What is capital investment?
attending college/getting a degree beyond high school
Average production
average cost per unit produced per set of resources
Time intensive commodities
dealing with a large amount of time and a small amount of goods
Unskilled Labor
does not require knowledge and most people can do it
Discouraged worker effect
during a recession, someone unemployed might feel pessimistic about the labor market and not seek employment and become a nonparticipant
Racial gap in labor participation rates
female gap - the labor participation rate had a 12%-15% in the 1950s but has now become way smaller. male gap - increased with African American men being 6-7% lower because of poorer labor market opportunities and low supply
Labor immobilities
geographical, institutional, or sociological barriers to labor mobility
A firm's production function
how much you can produce for all your inputs
Added worker effect
if the primary earner becomes unemployed, the other family member may enter the workforce to maintain income
homogeneous workers and jobs
it is the assumption that all workers and jobs are all the same and have identical characteristics - all workers receive the same wage
Skilled Labor
labor that requires specialized skills and training
Indifference curve
labor vs leisure
General inputs used by all businesses in their production process
labor, capital, resources
Nonparticipating workers
people who do not want to participate in the workforce
Personal perspective vs social perspective in terms of payoffs
personal- you have connections with the market that help you make decisions social- knowledge of labor economies gives you a better understanding of the market
Bureau of Labor Statistics
provides detailed stats on labor force participation and hours of work
Fair Labor Standards Act
requires employers to pay a wage premium for all hours worked in excess of 40 per week
Job ladders
sequence of jobs in an internal labor market, starting with a port of entry and continuing to move to higher skill sets and responsibilities
Labor vs Leisure tradeoff
the amount of income one must give up in order to achieve more leisure and vice versa
Marginal Revenue Product (MRP)
the amount of revenue that you get from one additional unit
Marginal production
the cost of one more unit to be produced
Nonwage Benefits
the differences in earnings for high school vs college graduates. Higher fringe earnings and obtain more pleasant jobs
Post World War "Baby Boom"
the generation that is now at the age of retirement and is the leading cause of the great resignation
Equilibrium wage
the intersection of the labor demand and labor supply curves
Acceptance wage
the lowest wage that is able to entice a worker to accept a job
The Labor Participation Rate
the percentage of the working-age population in the labor force
Static efficiency
the resources of a fixed quality that produces products at the lowest price at any point
Dynamic efficiency
the resources that produce goods and services at the lowest price in the long run
Population Base
the size of a nation's labor force depends on the size of the population and the fraction of its population participating in the labor market
Skill transferability
the skillset that is appropriate for one job/location to be able to be applied in another job/location
Labor Economics
the study of how workers behave, wages the employees receive, how demand changes, and how employers change
Total production
total amount produced per set of resources
T/ F Labor economies generally is considered more of microeconomics more than macroeconomics
true
Underemployment vs Overemployment
underemployment- when workers want to work more hours with increased earnings overemployement- choose less hours and more leisure
Scarcity
unlimited wants but limited resources
Waged structure
wage differentials broken down in categories; industry, location, occupation
Opportunity Cost
what you have to give up to get something else
Hedonic Theory of Wages
workers are interested in maximizing net utility and are willing to exchange that which produces utility to get reductions in something that yields disutility
Occupational mobility
workers movement to a different occupation