The labour market: wage determination Flashcards
What is economic rent?
The payment received by a factor of production over and above that which is the needed to keep it in its present occupation
What is transfer earnings?
The minimum payment required to keep a factor of production in its present use
What are trade unions?
An organisation of workers who join together to further their own interests
What is a trade union mark up?
The addition to wages secured by members of a trade union
When trade unions mark up their wages, although it usually leads to unemployment, how can this be prevented?
Shifting the MRP curve to the right
What is a monoposonist?
A single dominant buyer
What are wage differentials?
Differences in wages arising between individuals, occupations, industries, firms and regions
What is discrimination?
Where groups of workers are treated differently to other workers in the same job regarding pay and employment
What is labour market failure?
Where the free market fails to achieve an efficient allocation of resources in the labour market
What is negative discrimination?
When a group of workers is treated less favourably than others
What are the costs of negative discrimination? (3)
Lower MRP
Lower pay for the workers who experience discrimination
Find it more difficult to find jobs
What is positive discrimination?
When a group of workers are treated more favourably than others
What are the benefits of positive discrimination? (2)
Higher MRP
Higher wage rates
