Term
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Definition
| the amount of time an individual is willing to work at various wage rates. |
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Term
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Definition
| higher wages mean that the value of work has increased and the opportunity cost of leisure are higher, so work is substituted for leisure. |
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Term
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Definition
| higher wages mean you can maintain the same standards of living by working fewer hours. The Impact on labor supply is generally negative |
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Term
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Definition
| is derived from the demand for the firm's product and the productivity of labor. |
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Term
| Marginal physical product of labor |
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Definition
| the additional output a firm receives from employing an added unit of labor (MPP l = change in Q / change in L) |
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Term
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Definition
| the value of another worker to the firm is equal to the marginal physical product of labor (MPP l) time’s marginal revenue (MR). |
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Term
| Value of the marginal product |
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Definition
| the value of the marginal product of labor (VMP l) is equal to price multiplied by the marginal physical product of labor, or P x MPP l |
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Term
| Elasticity of demand for labor |
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Definition
| equal to the percentage change in the quantity of labor demanded divided by the percentage change in the wage rate. |
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Term
| Marginal factor cost (MFC) |
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Definition
| the added cost associated with hiring one more unit of labor. For competitive firms, it is equal to the wage; but for monopsonists, it is higher than existing workers must be paid this higher new wage, making MFC> W. |
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Term
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Definition
| A labor market with one employer |
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Term
| Monopsonistic exploitation of labor |
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Definition
| because monopsonists hire less labor than competitive firms, and workers are paid less than the value of their marginal products, this difference is referred to as monopsonistic exploitation of labor. |
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Term
| Monopolistic exploitation of labor |
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Definition
| when a firm has monopoly power in the product market, marginal revenue is less that price (MR |
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Term
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Definition
the added cost associated with hiring one more unit of labor for competitive firms, it is equal to the wage' but for monopsonists, it is higher than the new wage (W) because all existing workers must be paid this higher new wage, making MFC>W.
Capital all manufactured products that are used to produce goods and services |
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Term
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Definition
| all manufactured products that are used to produce goods and services. |
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Term
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Definition
| the value of an investment (future stream of income) today. The higher the discount rate the lower the present value today, and vice versa. |
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Term
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Definition
| uses the present value formula but subtracts costs, then finds the interest rate (discount rate) at which this investment would break even. |
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Term
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Definition
| The return to land as a factor of production. Sometimes called economic rent |
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Term
| Investment in human capital |
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Definition
| investments such as education and on the job training that improve the productivity of human labor |
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Term
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Definition
| the argument that higher education simply lets employers know that the prospective employee is intelligent and trainable and has the discipline to potentially are a good employee. |
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Term
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Definition
| typically done by employers, ranging from suggestions at work to sophisticated seminars. |
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Term
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Definition
| that improves a worker’s productivity in all firms. |
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Term
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Definition
| that improves a worker’s productivity in a specific firm. |
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Term
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Definition
| when workers of equal ability are paid different wages or in any other way discriminated against because of race color , religion, gender, age , national origin, or disability |
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Term
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Definition
| markets labor markets split into separate parts. This leads to different wages paid to different sectors even though both markets are highly competitive. |
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Term
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Definition
| an approach to determining wage rates for specific occupations that assume that every job has essential characteristics that possess an inherent worth independent of market forces. |
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Term
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Definition
| occurs when unions clash with one firm and put pressure on a neutral; second firm to enlist the help of the second firm to obtain the union’s objectives with the original firm. |
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Term
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Definition
| workers must belong to the union before they can be hired. |
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Term
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Definition
| non union hires must join the union within a specified period of time. |
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Term
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Definition
| workers must belong to the union before they can be hired |
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Term
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Definition
| employees are not required to join the union, but must pay dues to compensate the union for its services. |
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Term
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Definition
| created by the Taft Hartley act that permitted states to outlaw union shops. |
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Term
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Definition
| the difference between what consumers would be willing to pay and the market price. It is equal to the area above market price and below the demand curve. |
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Term
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Definition
| the difference between market price and the price at which firms would be willing to supply the product. It is equal to the area below market price and above the supply curve. |
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Term
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Definition
| the sum of consumer and producer surplus |
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Term
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Definition
| when markets are not competitive or involve public goods, externalities, or common property resources, markets will fail to provide the optimal level of output, and will provide output at too high or low a price. |
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Term
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Definition
| that, once provided, no one person can be excluded from consuming, and one person’s consumption does not diminish the benefit to others from consuming the good |
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Term
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Definition
| the consumption of a good or service by one person does not reduce the utility of that good or service to others. |
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Term
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Definition
| once a good or service is provided it is not feasible to exclude others from enjoying that good or service |
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Term
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Definition
| analysis a methodology for decision making that looks at the discounted value of the costs and benefits of a given project. |
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Term
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Definition
| resources that are owned by the community at large (e.g., parks, ocean fish, and the atmosphere) and therefore tend to be overexploited because individuals have little incentive to use them in a sustainable fashion. |
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Term
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Definition
| the impact on third parties of some transaction between others where the third parties are not involved. An external cost (or negative externality) harms the third parties, whereas external benefits (positive externalities result in gains to them.) |
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Term
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Definition
| if transaction costs are minimal (near zero), a bargain struck between beneficiaries and victims of externalities will be efficient from a resource allocation perspective. As a result, the socially optimal level of production will be reached for example, whether polluters are given the right to pollute or, the victims are given the right to be free of pollution. |
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Term
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Definition
| when the incentives of politicians and government bureaucrats are not in line with the public interest. |
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Term
| Command and control policies |
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Definition
| environmental policies where standards are set and regulations are issued and these are then enforced by the legal and regulatory system. |
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Term
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Definition
| environmental policies that use charges, taxes, subsidies deposit refund systems or tradable emissions permits to achieve environmental ends. |
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Term
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Definition
| a flow measure reflecting the funds received by individuals or households over a period of time, usually a week, month, or a year |
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Term
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Definition
| a stock measure of an individual’s or family’s assets net of liabilities at a given point in time. |
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Term
| Functional distribution of income |
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Definition
| the distribution of income for resources of factors of production (land, labor, capital, and entrepreneurial ability). |
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Term
| Personal or family distribution of income |
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Definition
| the distribution of income to individuals or family groups (typically quintiles or fifths of the population). |
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Term
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Definition
| a graphical method of showing the income distribution by cumulating families of various income levels on the horizontal axis and relating this to their cumulative share of total come on the vertical axis |
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Term
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Definition
| a graphical method of showing the income distribution by cumulating families of various income levels on the horizontal axis and relating this to their cumulative share of total come on the vertical axis |
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Term
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Definition
| income levels for various household sizes below which these people are considered living in poverty. |
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Term
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Definition
| the difference between the poverty threshold and a family’s income. |
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Term
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Definition
| to poverty the ratio of family poverty threshold. Family’s ratios below 0.5 are considered severely poor, families with ratios between 0.5 and 1.0 are considered poor, and those families with ratio between 1.0 and 1.25 are considered near poor. |
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