CH17: Wage determination

Question 1

What are the factors for high productivity?

Answer 1

Plentiful capital
access to a lot of natural resources
quality labor
advanced technology

Question 2

What is the relation between real wage and productivity?

Answer 2

they are directly related

Question 3

What is monopsony?

Answer 3

a market structure where there is a single buyer for good and services

Question 4

What are the characteristics of monopsony?

Answer 4

single buyer
Firms are wage makers
Workers have limited employment option

Question 5

How can unions increase the wage rate?

Answer 5

increase in union labor
unions can boost wage rates by reducing supply of labor
encourage workers to put pressure on firms

Question 6

What is Bilateral monopoly?

Answer 6

market in which there is a single seller and single buyer

Question 7

What are major causes for wage differentials?

Answer 7

Ability
education and training
Lack of job information
Geographic immobility
Union and government restraints
Discrimination