Factor Markets Flashcards
Marginal Revenue Product of Labor (MRP of L)
MRP of L = MP of L x P of Output
Monopsony
When one firm is the sole purchaser of labor services in a market
Marginal Factor Cost (MFC)
The additional cost of hiring one more worker
Union Intentions
- Increase D of L
- Decrease S of L
- Negotiate Higher Wages
Bilateral Monopoly
When there is just one seller and one buyer in the same market
Market Failure
Occurs when resources are not allocated optimally
Imperfect Information
Means that buyers and/or sellers do not have full knowledge about available markets
Externalities
Costs or benefits felt beyond those causing the effects
Marginal Private Cost (MPC)
The additional cost per quantity in a private market
Marginal External Cost (MEC)
The additional cost imposed to those not in the market
Public Goods
Goods that many individuals benefit from at the same time
Nonrival
Means that one person’s consumption of a good does not affect its consumption by others
Nonexcludable
Goods cannot be held back from those who want them
Free Rider
One who attempts to benefit from a public good without paying for it
Lorenz Curve and Gini Coeffient
Measure income equality
Poverty Line
The official benchmark of poverty
Progressive Tax
The government receives a larger percentage of revenue from families with larger incomes
Regressive Tax
Collects a larger tax from families with smaller incomes
Proportional Tax
Collects the same percentage of income from all families
Social Security
Provides cash benefits and health insurance to retired and disabled workers and their families
Public Assistance/Welfare
Provides temporary assistance to the very poor
Supplemental Security Income (SSI)
Assists very poor elderly individuals who have no assets or Social Security Entitlements
Unemployment Compensation
Provides temporary assistance to unemployed workers
Medicaid
Provides and health and hospitalization benefits to the poor
Food Stamp and Public Housing
Provide food and shelter for the poor
