Econ 5 Flashcards
Change in Labor Demand
A shift of the entire labor demand curve, brought on by a change in a ceteris paribus condition.
Change in Labor Supplied
A shift of the entire labor supply curve, brought on by a change in a ceteris paribus condition.
Change in Quantity of Labor Demanded
A movement along a labor demand curve, brought on by a change in the wage rate.
Change in Quantity of Labor Supplied
A movement along a labor supply curve, brought on by a change in the wage rate.
Circular Flow Diagram
A diagram that views the economy as consisting of households and firms interacting in a goods and services market and a labor market.
Cyclical Unemployment
Unemployment closely tied to the business cycle, like higher unemployment during a recession.
Flow of Goods and Services
The process by which households trade with businesses to acquire products and services.
Flow of Wages or Income
The process by which households trade their time and skills with businesses and are compensated with wages or income.
Frictional Unemployment
Unemployment that occurs as workers move between jobs.
Labor Demand
The quantity of workers that a business seeks to hire at a given wage rate.
Labor Market Equilibrium
Where labor demand equals labor supply.
Labor Supply
The quantity of workers that choose to enter the labor market at each given wage rate.
Loose Labor Market
A situation where unemployment is high, with few job openings at businesses but many laborers available for these positions.
Marginal Revenue Product
The additional revenue that is generated from selling an additional unit of a product or service.
Structural Unemployment
Unemployment that occurs because individuals lack skills valued by employers.
Tight Labor Market
A situation where unemployment is low. There are many job openings at businesses but few laborers available for these positions.
Unemployment as a Signal of Economic Health
Using the unemployment rate as signal of the job market and tight versus loose labor market.
