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20 Cards in this Set

  • Front
  • Back
diminishing returns to labor
if the amount of capital and other inputs in use is held constant, then the greater the quantity of labor already employed, the less each additional worker adds to production
worker mobility
the movement of workers between jobs, firms, and industries
skill-biased technological change
technological change that affects the marginal products of higher-skilled workers differently from those of lower-skilled wokers
frictional unemployment
the short-term unemployment associated with the process of matching wrokers with jobs
structural unemployment
the long-term and chronic unemployment that exists even when the economy is producing at a normal rate
cyclical unemployment
the extra unemployment that occurs during periods of recession
Five important labor market trands:
1)avg real wages have risen both in US and other countries
2)real wage growth has slowed in US since 70's
3)in US wage inequality has increased; real wages of unskilled workers have declined, while real wages of skilled workers continue to rise
4)employment has grown in US
5)since 1980 western Europe nations have had very high rates of unemployment and low rates of job creation
reservation price
the compensation level that leaves you just indifferent between working and not working
Two reasons for increasing inequality:
2)technological change
types of unemployment:
impediments to full employment:
1)minimum wage laws
2)labor unions
3)unemployment insurance
4)other government regulations
To calculate the value of marginal product of workers, you need information on marginal product of workers and the market price. True/False?
In a car wash business, hiring an extra worker increases output by 6 clean cars per day. The business charges customers $7 per car, and the going real wage for workers in this business is $40 per day. The business shouldn't hire an additional worker. True/False?
The shifters of the labor demand curve are the relative price of a firms output, the productivity of workers, and the real wage rate. True/False?
If the reservation price exceeds the benefit of working, you should supply work. True/False?
An increase in the working-age population lowers the real wage and increases employment.
In the automobile industry, and increase in the relative price of cars raises both the equilibrium real wage of workers and employment in the industry. True/False?
John lost his job because of a recession. John is __________ unemployed.
Elizabeth lost her job because her job skills have become obsolete. She is __________ unemployed.
Amy quit her job and currently looking for a similar job in a different location. She is __________ unemployed.