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20 Cards in this Set
- Front
- Back
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bilateral monopoly
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a market in which there is a single seller and a single buyer
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derived demand
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the demand of a resource that depends on the demand for the products it helps produce
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elasticity of resource demand
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a measure if the responsiveness of firms to a change in the price of a particular resource they employ or use; the percentage change in quantity of the resource demanded divided by the percentage change in its price
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incentive pay plan
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a compensation structure that ties worker pay directly to performance
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human capital investment
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any expenditure undertaken to improve education, skills, health, or mobility of workers, with an expectation of greater productivity and thus a positive return on investment
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industrial union
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a labor union that accepts as members all workers employed in a particular industry
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least-cost combination of resources
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the quantity of each resource a firm must employ in order to produce particular output at least total cost; the combination at which the ratio of the marginal product to its marginal resource is the same on the last dollar spent
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marginal product
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the additional output produced when 1 additional unit of resource is employed; equal to the change in total product divided by the change in quantity of a resource employed
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marginal productivity theory of income distribution
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the contention that the distribution of income is equitable when each unit of each resource receives a money payment equal to its marginal contribution to a firms total revenue
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marginal resource cost
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the amount the total cost of employing a resource increases when a firm employs 1 additional unit of the resource; equal to the change in total cost of the resources divided by the change in quantity of the resource employed
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marginal revenue product
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the change in a firms total revenue when it employs 1 additional unit of a resource; equal to the change in total revenue divided by the change in the quantity of the resource employed
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minimum wage
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the lowest wage that employers may legally pay for an hour of work
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monopsony
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a market structure in which there is only a single buyer of a good, service, or resource
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non-competing groups
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collections of workers in the economy who do not compete with each other for employment because the skill and training of the workers in one group are substantially different from the workers in the other group
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occupational licensing
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the laws of state or local governments that require that a worker satisfy certain specified requirements and obtain a license from a licensing board before engaging in a particular occupation
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output effect
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the situation in which an increase in the price of one output will increase a firms production costs an reduce its level of output, thus reducing the demand for other outputs; conversely for decrease in the price of the input
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profit-maximizing combination of resources
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the quantity of each resource a firm must employ to maximize its profit or minimize its loss; the combination in which the marginal revenue product of each resource is equal to its marginal resource cost
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purely competitive labor market
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a resource market in which many firms compete with one another in hiring a specific kind of labor, numerous equally qualified workers supply that labor, and no one controls the market wage rate
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real wage
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the amount of goods and services a worker can purchase with his or her nominal wage during some period of time; the purchasing power of the nominal wage
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substitution effect
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a change in the quantity demanded of a consumer good that results from a change in its relative expensiveness caused by a change in the products price; the effect on a change in the price of a resource employed by a firm , assuming no change in its output.
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