Booklet 6

Question 1

What is it called when someone is unable to afford the basic necessities of life (food, water, shelter, warmth, clothing etc.)?

Answer 1

Absolute poverty

Question 2

What is a situation where it is more rewarding for someone to rely on transfer payments from the government than to accept paid work (i.e. the lost welfare benefits exceeds the increased pay)?

Answer 2

The benefits trap

Question 3

What is a situation where all employees are compelled to belong to a trade union as a condition of employment?

Answer 3

A closed shop

Question 4

What is the process by which an employer and a trade union (or unions) negotiate the pay and conditions of a group of workers?

Answer 4

Collective bargaining

Question 5

What is the additional pay given to workers in order to encourage them to do jobs that are physically difficult, dangerous or unpleasant (irrespective of the level of skill required)?

Answer 5

Compensating wage differentials

Question 6

What is labour that is not demanded for it’s own sake, but is instead based entirely on demand for the output that it produces?

Answer 6

Derived demand for labour

Question 7

What is a numerical measure of inequality in the distribution of income based on the Lorenz curve?

Answer 7

Gini coefficient

Question 8

What is a flow of money earned or received over time called?

Answer 8

Income

Question 9

What is time spent purely in enjoyment?

Answer 9

Leisure

Question 10

What is a graphical illustration of the distribution of income in an economy?

Answer 10

The Lorenz curve

Question 11

What is the change in total output generated by the employment of an additional unit of a variable factor of production - typically the amount of additional output produced by an extra worker?

Answer 11

Marginal physical product (MPP)

Question 12

What is the value of the additional output produced by an extra worker. This can be found by multiplying MPP by the price of a unit of output?

Answer 12

Marginal revenue product (MRP)

Question 13

What is the only buyer in a market?

Answer 13

Monopsony

Question 14

What are the overall benefits from a particular job (pecuniary benefits + non-pecuniary benefits - disutility of work) called?

Answer 14

Net Advantages

Question 15

What are the non-financial rewards for work e.g. free on-site gym/childcare?

Answer 15

Non-pecuniary benefits?

Question 16

What are the financial rewards for work e.g. salary?

Answer 16

Pecuniary benefits

Question 17

What is a situation where someone born into poverty is more likely to remain in poverty and then have children who are born into poverty so the cycle repeats itself due to a lack of social mobility called?

Answer 17

The poverty cycle

Question 18

What is it called when someone is poor relative to other people? In the UK this is formally defined as earning less than 60% of median household income.

Answer 18

Relative poverty

Question 19

What is the total amount of output produced called?

Answer 19

Total physical profit (TPP)

Question 20

What is a group of workers who come together to protect their interests (usually in terms of pay and conditions) called?

Answer 20

A trade union

Question 21

What is the term used to describe paying different workers different amounts to complete the same work or do the same job?

Answer 21

Wage discrimination

Question 22

What is the stock of assets someone has at a given moment in time called?

Answer 22

Wealth

Question 23

What is time spent in paid employment called?

Answer 23

Work