Lesson 6 Flashcards
____ are the factors of production, plus the element of market
Factor Markets
Is the workers effort
Labor
Refers to the facilities, equipment and other resources that aid in the production of goods and services.
Capital
The capital as a factor of production is referred to as the ______, not actually the financial capital or the monetary requirement in starting a business.
Physical Capital
Is the ground or the natural resources required in the production
LandLand
Is the ability of one person to see economic opportunities
Entrepreneurship
The _____ is able to put together land, labor, and capital to build these opportunities.
Entrepreneur
For land, the income received is called _____, for labor _____, for capital ___, and for entrepreneur is the income from _____.
Rental Income, Wages, Interest, Profit
There are also markets for the factors of production or _____ to production
Inputs
This keeps the circular flow of economic activity moving
Factor Markets
Is the market for the factors used in the production of a consumer product, and not the good produced itself.
Factor Market
Is the market for final good or service which is usually considered to be a consumer product.
Product Market
Are usually the best examples to represent factor markets while markets for capital and land also count as factor markets or markets for factors of production
Labor Markets
Is a market where people offer their skills to employers in exchange for salaries and other forms of compensation.
Labor Market
In Labor Market Equilibrium, it is for the fact that individuals would be ____ willing to work when wage is ____, while firms prefer to hire when the wage is ____
More - High
Low
____ or ____ is simple like a demand for a good so it generally follows the law of demand.
Labor Demand or Demand for Labor
This mean that employers will hire more people when wages go down.
Labor Demand
As wage increases, more people will enter labor market and compete for higher paying jobs, and vice versa
Labor Supply or Supply of Labor
This is when the labor demand and supply meet at a certain wage and quantity of workers, equilibrium takes place. This point of equilibrium is called?
Market Clearing
When jobs are easy and safe, we assume that the wages are on the average and most people would want to have such jobs. When the job tend to become difficult and dangerous, workers would naturally require a higher wage in order to perform such kins of job. What do you call this?
Equilibrium Wages
This ___ is the difference in wafes that arises to offset the nonmonetary charateristics of different jobs.
Compensating Differential
A ______ leads to an efficient allocation of resources.
Competitive Equilibrium
When people exhibit intelligence abobe the others, they usually get better wages due to their _______.
Natural Ability
Since it is more difficult to earn a college degree, graduates are then perceived to be highly capable. This is ______
Signaling Theory
This phenomenon suggests that only individuals who are highly sought after or admired by large crowd earn huge amounts of money can make them very important in the world.
Superstar Phenomenon
______ is a by product of micro-level decisions of the workers and the firms.
Unemployment
_____ explains that it would be beneficial for firms to pay workers above the equilibrium wage rate to encourage workers to work more effciently and make more profit firm.
The Efficiency-Wage Theory
In the case of a firm paying lower wages to its employees, this would cause employees, especially those with good skills, to look for different jobs elsewhere. In effect, the firm would be left with employees with lower skill levels, turning out lesser productivity.
The Efficiency-Wage Theory
High wages give employees an incentive to stay with the company which is compensating them well. This results to a __________, which then reduces the company’s need to train and hire more workers.
Reduced Worker Turnover
______ argues that wages depend on the supply and demand for labor and that labor demand depends on the value of the marginal productivity of labor.
The Neoclassical Theory
Chapter summary.
READY!
A ____ is the market for a final good or service which is usually considered to be a consumer product.
Product Market
A______ is the market for the factors used in the procustion of a consumer product, and not the good produced itself.
Factor Market
A _____ is a market where people offeer their skills to employees in exchange for salaries and other forms of compensation.
Labor Market
The _____ is simply a demand for a good so it generally follows the the law of demand.
demand for labor
The ___ states that id the price of labor increases, then the supply of labor will also increase and vice versa.
Law of Supply
______ is the difference in wages that arises to offset the nonmonetary characteristics of different jobs.
Compensating differential
The ____ suggests that only individuals who are highly sought after or admired by a large crowd can earn huge amounts of money, thus making them very important in the world.
Superstar phenomenon
A ____ rate in an economy signals a healthy economic ativity in a country
Good Employment Rate
The _____ explains that it would be beneficial for firms to pay workers above the equilibrium wage rate to encourage them to work more efficiently
Efficiency Wage Theory
