Park Place
Treating equals unequally or treating unequals equally.
Discrimination
The supplier of the labor resource
Worker
The cost borne by the producer of a good or service.
Private cost
When a person can benefit from an activity without paying for it
Free rider
When a third party has to bear part of the burden of the costs or receives part of the benefits
Externality or spillover
Level of income that would be need to pay for a minimal diet
Poverty Line
A good that is not excludable and nonrival in consumption
Public Good
The economically optimal amount of pollution
Marginal benefit = Marginal cost
When a third party has to bear the burden of someone else's actions, the third party charges too ______ and produces too ________.
Charges too much
Produces too little
Goods that are excludable and nonrival in consumption
Club Goods
The demand for a resource comes from the demand for the final product
Give an example of a compensating differential
Time of day/day of week
Poor or risky working conditions
Education
Additional credential
Time with employer (longevity)
Higher pay to increase productivity, reduce turnover, or attract better workers
Efficiency wages
When there is only one company in a small town that hires workers
Monopsony
Current level of the international poverty line
$3.00 per person per day
Requirement that a family’s income not exceed a certain level to be eligible for public assistance
Means Test
The additional revenue from hiring an additional worker
Marginal Revenue Product of Labor (or value of the marginal product)
Forcing a firm to hire more people than it normally would or imposing restrictions or conditions on the output from workers
Featherbedding
Recipients must perform some work activities within two years of receiving welfare or risk losing benefits
Workfare
Corrective taxes imposed to deal with the effects of a negative externality
Pigovian taxes
Compares the cumulative percentage of families earning a cumulative percentage of income to perfect equality.
Lorenz Curve
The overuse of a resource until the resource is exhausted
Tragedy of the Commons
Environmental policy to set an amount and punish firms if they pollute too much
Command and control
Plan under which families below a certain break-even level of income would receive cash payments that decrease as their incomes increases.
Negative Income Tax
The private sector can get to socially desirable amount with little or no government intervention
Coase Theorem