Laws
Shifts in the demand and supply curve
Terms
Price ceilings and floors
Wild Card
100
higher price of labor = high price of labor supplied; lower price for labor = lower quantity supplied
Law of supply
100
An increase in population causes a ________
(in terms of labor)
supply curve shifts to the right (outwards shift)
100
The amount (a percent) a lender charges a borrower for borrowing money (ie. the rate of return)
Interest rate
100
______ are very rare in the labor market because __________
price ceilings; rules that prevent people from earning income are not politically popular
100
What is the difference between minimum wage and living wage
minimum wage is a price floor put in place by the government that makes it illegal for an employer to pay employees less than a certain hourly rate while living wage is the amount a full-time worker would need to make to afford the essentials of life: food, clothing, shelter, and healthcare (ie. a higher minimum wage)
200
higher salary or wage (price) in the labor market = decrease in the quantity of labor demanded by employers; Lower salary or wage (price) in the labor market = increase in the quantity of labor demanded
Law of demand
200
An increase in education required for a job causes a _______
(in terms of labor)
inwards shift of the supply curve (to the left)
200
The demand for a good or service (like workers) that results from the demand for a different, or related, good or service (like the product they produce)
Derived Demand
200
What is the primary concern with raising the minimum wage and why
that many people will suffer unemployment because companies want to make their production costs as little as possible
200
salaries above the equilibrium result in a _______ and salaries below the equilibrium result in a _______.
excess supply of labor / surplus of labor; shortage of labor
300
If there is an excess of labor the labor market will move back toward the equilibrium by ________
employers offering a lower salary to potential employees
300
Demand for output causes a _________
increase (shift to the right) of the demand curve
300
Increasing a price & blaming it on an external factor
Price gauging
300
Is minimum wage considered a price ceiling or floor? Why?
Price floor because it requires a company to not go below a certain price
300
Name the THREE main reasons why demand and supply curves are important
Simplifies complex scenarios so they are easier to understand, can explain the existing levels of prices, wages, and rates of return, can explain how economic events will cause changes in prices, wages, and rates of return
400
If there is an shortage of labor the labor market will move back toward the equilibrium by ________
some employers offering a higher salary to potential employees
400
An increase of the number of companies causes a _______
(in terms of labor)
outwards shift (shift to the right) in the demand curve
400
A way of making decisions that considers how the options will affect the present time and the future time
intertemporal decision making
400
What is a price ceiling
tell me
400
What are the two things people consider when deciding how to save their money
1) how much to save
2) How to divide up their savings among different forms of financial investments
Based rates of return (good thing) and the risks involved (bad thing)
500
Concern about country/business going into debt has what affect on its financial capital
Decrease in supply & higher interest rate for the country/business
500
An increase in technology causes a(n) _________ for ____-skilled workers but a(n) _________ for _____-skilled workers
outward shift (to the right) in the demand curve for high; inward shift (to the left) in the demand curve for low
OR
inward shift (to the left) in the demand curve for low; outward shift (to the right) in the demand curve for high
500
the monetary assets required for a business to provide goods and services; economic resources measured in terms of money
Financial Capital
500
what is a price floor
tell me
500
Name each step of the 4-Step process used to determine the affect of new technology on high/low skilled workers (DOUBLE OR NOTHING)
1) Determine the graphs for high-skill and low-skill workers before new technology
2) Determine if the new technology affects the supply of labor from households or the demand for labor from firms
3) Determine if the new technology increases or decreases demand
4) Determine how these changes affect wages of the workers