PHASE 3: ADOBE CH. 10: Wages Flashcards Preview

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Flashcards in PHASE 3: ADOBE CH. 10: Wages Deck (42):
1

shifting to resource markets

pricing/production of g/s to pricing/employmet of resources, all firms demand productive resources - get resources from households - land, labor, capitol, entrep. resoruces

2

perf comp labor market

individual employers, indivd workers are wage takers bc neither cn control market rate, workers with identical skills

3

strength of albor demand depneds on

productivty of labor and price of good it helps produce

4

mrp is what

marginal revenue product

5

marginal revenue product

value to firms of an additional unit of labor input -how many units of labor to hire?

6

mrp labor equation

change in tr/ unit change in labor = price product * mp labor

7

mr

value to firm of the last unit of output mr = mc profit maximizing quantity

8

marginal resource cost

mrc

9

what is mrc

additional to the total cost due to eah additional unit of labor, mrc = going market rate

10

mrc labor equation

change in tc/ unit change in labor = market wage rate

11

mrc is what

cost of additional unit of labor output - how many to hire

12

mc is what

cost of aditional unit of output - how many units of output to produce mr = mc

13

rule for employing labor

mrp = mrc

14

mrplabor = mrc labor is what

inputs of resource

15

mr = mc is what

output of product

16

labor demand shifters

hange in product demand, change in productivity, change in price of substitue resouses, change in pice of complimentary resources

17

change in product demand

increase in d for product = increase d for labor use in production

18

increase in p demand equals

increase product price, increase mrp labor

19

increase in labor productivity equals

increase in d for resource

20

substitution effect

derease price of capital equals substitute capital for labor, output at lower cost

21

output effect on labor demand

decrease price of capital equals decrease cost of proudce --- increase output equals increase demand for resource

22

substitution efect

decrease price of capital, decrease in labor demand

23

elasticity of labor demand

change in demand vs change in qty demanded - change in qty deanded of labor = movement along fixed labor demand curve

24

elasticity equation

eW= percent change in labor qty dem / percent change in wage rates

25

decreaese in wage is

increase in labor demanded qty more than prop, increase total wage payment, Ew < 1, labor demand inelastic

26

Ew>1 is qhat

labor demand elastic

27

factors determining wage elasticity for demand

ease of resource substituatbility, elasticity of product demand, ratio of labor cost to total cost

28

ease of resource substitutability

greater substitaution of other resources of labor, more wage elastic labor demand is

29

elasticity of product demand

greater price elasticity of product demand equals greater wage elastiicty of labor demanded

30

inelastic product demand is what in amount of labor

small decline in amt of labor D

31

elastic product demand is what

large decline in amt of labor D

32

ratio of labor cost tot tal cost

larger prorpotion of total roduct cost accounts for by labor - more elastic demand is for labor; large amt of total cost equals large decline in labor demand

33

monopsony

market structure where there is a single buyer, firm is wage maker bc wage rate pays varies directl with number of workers it employs

34

types of unions

exclusive/craft union model, inclusive/industrial union model

35

exclusive/craft union model

unions boost wage rates by reducing supply of labor -labor unions have supported legislation restricting immigration, reduce child labor, encourage ompuslroty retirement, shorter workweek - restrict number of workers who can join union with skills required, force employers to agree to hire only union members - complete control of labor supply, exclusion leads to elvetated wages

36

occupational licensing

pressure - state fed gov pass laws saying certain group practice trade only if meet requiremnt such as level of edu, work epxerience, exams

37

inclusive/industrial union model

most unions seek to organize all available workers, seek allavaiable unskill, skill, semiskill workers in an industry, large amount of workers, labor supply

38

weak labor D or/and high labor supplly equals

low equilibrium wage

39

strong labor D and r low labor supply is

high equilibriu wage

40

supply side factors

edu, training, ability, compensating differences

41

compensating differences

paid to ompensate for nonmonetary differences i nvarious jobs

42

fair labor standards at of 1938

fed min wage