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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 buyer and a single seller
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derived demand
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demand for a resource depends on the demand for the products it can be used to produce
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elasticity of resource demand
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a measure of the responsiveness of firms to change in the price of a particular resource they employ or use; the percentage change in the quantity of the resource demanded divided by the percentage change in its price
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human capital investment
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any expenditure undertake to improve the education, skills, health or mobility of workers with an expectation of greater productivity
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incentive pay plan
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compensation plan in which ties workers directly yo performance
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industrial union
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join as members all workers employed in an industry
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least-cost combination or resources
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the quantity of each resource a firm must employ in order to produce a particular output at the lowest total cost; the combination at which the ratio of marginal product of a resource is employed to its marginal resource cost is the same for the last dollar spent on each of the resources employed
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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 the quantity of a resource employed
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marginal productivity theory of income distribution
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the contention that a distribution of income is equitable when each unit of each resource receives a money payment equal to its marginal contribution to the firms 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 a resource divided by the change in quantity of resource employed
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marginal revenue product
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the change in a firm's total revenue revenue when it employ's 1 additional of a resource; equal to the change in total revenue divided by the change in the quantity of a resource employed
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minimum wage
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lowest wage employers may legally pay for an hour of work
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monopsony
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market structure in which there is only a single buyer of a good, service, or resource
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noncompeting group
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workers from one group do not qualify for the occupations of another group
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occupational licensing
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requires a worked to satisfy certain specified requirements 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 input will increase a firm's production costs and reduce its level of output, thus reducing the demand for the other inputs; conversely for a 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 profits 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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labor market in which neither the individual workers nor the individual firms have any control over the market wage rate
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real wage
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purchasing power of the nominal wage
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substitution effect
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the effect of a change in the price of a resource on the quantity of the resource employed by a firm, assuming no change in its output
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