Econ 201 Exam 3

Front 1

Wage-Employment Trade-off

Back 1

The lower the elasticity of demand for labor, the smaller the cutback in labor for a given wage increase

Front 2

Factors Affecting Elasticity of Demand for Union Labor

Back 2

Availability of subsitute products, availability of substitute factors

Front 3

Factors affecting demand for Union labor

Back 3

Increasing product demand, Increasig substitute factor prices, Increasing marginal physical product

Front 4

Closed Shop

Back 4

Organization in which employee must belong to a Union in order to be hired

Front 5

Union Shop

Back 5

Must become union member within certain period after hiring.

Front 6

Collective bargaining

Back 6

Process whereby wage rates and other issues are determined by a union bargaining with management on behalf of all union members

Front 7

Monopsomy

Back 7

Single buyer in factor market

Front 8

Ex Ante Distribution of Income

Back 8

before tax and transfer

Front 9

Post Ante Distribution of Income

Back 9

after tax and transfer

Front 10

Transfer Payment

Back 10

Payments to persons that are not made in return for goods and services

Front 11

In Kind Transfer

Back 11

Food Stamps, medical assistance, subsidized housing (payment made in good rather than cash)

Front 12

Ways gov. can change dist. of income

Back 12

taxes, transfer payments

Front 13

Individual income

Back 13

Labor income + Asset Income + Transfer Payments - Taxes

Front 14

Lorenz Curve

Back 14

graph of income distribution expressing the relationship between cumulative percentage of households and cumulative percentage of income

Front 15

Gini Coefficient

Back 15

measure of the degree of inequality in the income distribution

Front 16

Gini Equation

Back 16

Area between the line of perfect income equality and actual Lorenz Curve/ Entire triangular area under the line of perfect income equality

Front 17

Gini coefficient = 0

Back 17

perfect income equality

Front 18

Gini coefficient = 1

Back 18

complete income inequality

Front 19

Factors contributing to Income Inequality

Back 19

Innate abilities and attributes, work and leisure, Education/Training, Risk Taking, Luck

Front 20

Human Capital

Back 20

Education, development of skills, and anything else that is particular to the individual and increases productivity

Front 21

Poverty statistics are generally not adjusted for

Back 21

In kind benefits, unreported and illegal income(no, really?), regional differences in cost of living

Front 22

Positive rate of time preference

Back 22

preference for earlier availability of goods over later availability of goods

Front 23

Roundabout method of production

Back 23

production of capital goods that enhance productive capabilities in order to ultimately bring about increased consumption

Front 24

Why do interest rates differ?

Back 24

risk, term of loan, cost of making loan

Front 25

Pure economic rent

Back 25

a category of economic rent where the payment is to a factor that is in fixed supply, implying that it has zero opportunity costs

Front 26

artificial rent

Back 26

rent controlled by government

Front 27

Theories of profit

Back 27

Profit and uncertainty, Profit and arbitrage opportunities, profit and innovation

Front 28

Marginal Social Costs

Back 28

MSC = MPC + MEC

Front 29

Marginal Social Benefits

Back 29

MSB = MPB + MEB

Front 30

Socially optimal amount of output

Back 30

Amount that takes into account and adjusts for all the benefits and costs (external and private)
MSB = MSC