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24 Cards in this Set
- Front
- Back
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compensation wages differentials |
differences in money wages compensation for differences in nonmonetary aspects of work |
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economic rent |
any payment to a factor in excess of its opportunity cost |
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full wage |
total monetary value of a job . the sum of money wages plus the monetary value of all the nonmonetary aspects of work |
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human capital |
the skills and ability acquired thorugh investment in schooling and on-the-job training |
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bilateral monopoly |
market where a monopsony and monopoly deal with each other |
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compensating wages differentials |
compensate workers for differences in working condition |
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noncompeting groups |
special skills and earn economic rent |
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discrimination |
occurs when workers with the same ability as other workers are denied well-paying jobs or receive less pay because of their race sex or other character |
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efficiency wages |
paying a higher wage itself to make worker work more efficient. |
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when workers are alike in skills and jobs |
are alike in amenities, all jobs will pay the same wage |
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at equilibrium wage |
the quantity of workers demanded equals the quantity supplied |
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factors increasing workers productivity inncreases wages |
more capital more natural resources and better technology all increases a nations wage level |
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factors of decreasing supply of workers |
increase wages ; a smaller population a smaller fraction of persons who work and fewer hours of work per worker all increase a nations wage level |
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higher wage has 2 effect |
the substitution effect increases work hours bc the higher wage make leisure time more expensive
the income effect reduces work hours bc higher income increases the demand for leisure time |
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the net income effect |
the net effect of a wage increases depends upon which effect is stronger. when the income effect dominates, a higher wage means worker want to work fewer hours, and lower wages worker want to work more hours. when the substitution effects dominates, a higher wage means workers want to work more hours and a lower wage means less hours |
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when workers are alike in skills and taste but jobs differ |
then all jobs will pay the same full wage |
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compensation wage differencetial |
differences in money wages wil compensate for differences in nonmonetary aspects of work
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economic rent |
a single worker can earn an econonomic rent as a result of having a skill or other attribute that is unique |
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whole groups of workers can earn economic rent |
if there are no other competing groups of workers to bid down their wage |
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unions face a trade-off between employment and wages when they organize a competitive industry |
unios trade off |
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unions may achieve higher wages |
by setting a minimum wage; by restricting labor supply; and when output demand is inelasic by reducing productivity |
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unions have two effect on nonunion wages |
1- those losing jobs in the union sector will spill over into the nonunion sector, lowering nonunion wages
2- nonunion employers, to avoid the threat of being unionized, may pay a higher wage |
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union, facing a monopsonist ( a monopply buyer of labor) |
can increase employment and wages - this does not mean they will |
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the highest level of employment is at the wage where the supply labor intersects the MRP curve |
highest level on unemployment |
