Labor
What is derived demand?
Demand for a resource because of the product it helps to produce
Is Minimum Wage a Price Floor or Ceiling and does it create a surplus or shortage of labor?
Price Floor
Surplus
Example of a Negative Externality
Pollution
What is an example of a private good?
Ice Cream Cone
Moving away from Allocative Efficiency (assuming no externalities) creates...
Dead Weight Loss
Elasticity of Demand Equation
% Change in Quantity Demanded/
% Change in Price
Two ways to find Marginal Revenue Product.
Marginal Product * Price and
Change in Total Revenue
What are efficiency wages?
Paying someone above market wage to reduce supervision, turnover and increase the penalty for shirking
Example of a Positive Externality
What is an example of a Public Good?
National Defense or Fireworks
The United States Tax System is...
Slightly Progressive
Price and Total Revenue move in opposite directions...
Elastic Demand
What is Marginal Factor Cost?
Cost of another unit of capital or labor
On the graph Monopsony hires at the same output as ______ at a (higher/lower) wage.
Union output
Lower wage
Negative Externality is (under/over)allocated unless government gives a (per unit/lump sum) (tax/subsidy).
Overallocated
Per Unit Tax
Characteristics of a Private Good
Rival and Exclusive
A Lump Sum Tax is...
Regressive
Income Elasticity of Demand
% Change in Quantity Demanded/
% Change in Income
Positive Normal
Negative Inferior
Least Cost Combination of Resources Equation using Labor and Capital
MPL/PL=MPC/PC
On the Monopsony graph does Perfect Competition hire (more/less) than Monopsony at a (higher/lower) wage?
More
Higher
Positive Externality is (under/over) allocated unless government gives a (Per Unit/Lump Sum) (Subsidy/Tax)
Underallocated
Per Unit Subsidy
Characteristics of a Public Good
NonRival and NonExclusive
The burden of the tax is on...
The group with the more inelastic curve
Cross Price Elasticity of Demand
% Change in Quantity Demanded of X/
% Change in Price of Y
Substitutes Positive
Complements Negative
Least Cost Combination of Resources Equation using Labor, Capital and MRP
(MRPC /PC)=(MRPL /PL)=1
On the Monopsony graph where does a Union produce?
Marginal Revenue Product = Marginal Factor Cost
Deadweight loss is present in externalities is present (before/after) Per Unit Taxes or Per Unit Subsidies.
Before
Public Goods are Underallocated to the market because of this group...
Free Riders
How is tax burden calculated
Per unit tax * Quantity
Four Determinants of Elasticity
Substitutable or Not
% of Income
Necessity/Luxury
Time