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
