Ch 23 employment and unemployment Flashcards
potential workers
civilians 16 and over excluding military and criminals or people in nursing homes
employed
full time or part time paid jobs
unemployed
do not have a paid job, have been looking for for in the prior four weeks, and are available for work
labor force
employed + unemployed
unemployment rate
unemployed / labor force x 100
opportunity cost of time
when an educated unemployed person does home production activities ex cleaning attic
when will a profit maximizing firm stop hiring labor
when the value of the marginal product of labor equals the market wage
shifts in demand curve
changing output price
changing demand for good and service
changing technology
changing input prices, ex cost of hair clippers
shifts in labor supply curve
changing tastes
changing opportunity cost of time, ex washing machines lower opportunity cost of working in home
changes in population
market clearing wage
competitive equilibrium wage
every worker who wants a job should eventually find one
frictional unemployemnt
unemployment resulting from mimperfect information about available jobs
ex a worker who lost a $40/hr job, finds a $20/hr job, but continues looking for a higher paying job. Only after he knows all available job opportunities does he take the $20/hr job
wage rigidity
wages are held above the competitive equilibrium leel
structural unemployment
quantity of labor supplied persistently exceeds the quantity of labor demanded
causes of wage rigidity
minimum wage
labor unions
colelctive bargaining
efficiency wages
paying wages above the wage workers are willing to work, increases productivity and profitability of a company
reduce worker turnoer
