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15 Cards in this Set
- Front
- Back
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Marginal Physical Product/Marginal product of labour (MP) |
The additional output a firm gets by employing one additional unit of labour |
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Value of marginal product of labour (VMP) |
The money value of the additional output a firm gets by employing one additional unit of labour. Declines in the short-run as the quantity of labour rises (law of diminishing returns). |
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Human capital theory |
A theory of pay determination that says a workers wage will be proportional to his or her stock of human capital |
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Human capital |
An amalgam of factors such as education, training, intelligence, energy, work habits, trustworthiness and initiative that effect the value of a worker's marginal product |
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Labour union |
A group of workers who bargain collectively with employers for better wages and working conditions |
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Compensating wage differential |
A difference in the wage rate - negative or positive - that reflects the attractiveness of a job's working conditions |
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Employer discrimination |
An arbitrary discrimination preference by an employer for one group of workers over another |
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Customer discrimination |
The willingness of consumers to pay more for a product produced by members of a favored group, even if the quality of the product is unaffected |
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Winner-take-all labour market |
One in which small differences in human capital translate into large differences in pay |
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Gini coefficient |
A measure of equality of distribution that compares the actual distribution with a benchmark of absolute equality |
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Lorenz curve |
The graph of the cumulative distribution of income or wealth by percentages of households or individuals from poorest to richest |
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In-kind transfer |
A payment made not in the form of cash, but in the form of a good or service |
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means-tested |
A benefit program whose benefit level declines as the recipient earns additional income |
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Negative income tax (NIT) |
A system under which the government would grant every citizen a cash payment each year, financed by an additional tax on earned income |
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Poverty threshold |
The level of income below which a family is "poor" |
