Factor Markets Flashcards
1
Q
How does the labor supply curve look in a competitive labor market?
A
Upward-sloping, as higher wages incentivize more individuals to work.
2
Q
What causes shifts in the labor supply curve?
A
Changes in population, education/training, preferences, and non-wage benefits.
3
Q
How might monopsony power affect wages and employment?
A
A monopsony (single employer) restricts employment and pays lower wages than a competitive market.
4
Q
What are factor markets?
A
Markets where factors of production (e.g., labor, land, capital) are bought and sold.
5
Q
What determines wages in a perfectly competitive labor market?
A
The intersection of labor demand (derived from marginal productivity) and labor supply.
6
Q
A
