2. Supply and Demand in Labor Markets/ Labor Relations (10 questions) * Demand Labor shifters: change in demand for a product, expectations about the economy, and changes in productivity of labor. * Supply Labor Shifters: immigrations and population growth, migration, wages in other professions, number of hours people are willing to work, nonwage income, amenities. * Labor is a derived demand; it is based on the demand for products or services. * Marginal Product of labor- how much each additional worker contributes; decreases as workers increase. * Marginal Revenue Product (MRP)- marginal product x price of product * Hire workers until marginal revenue product= wage rate
* Where profits are maximized.
* Cost and benefits of unions:
* Higher wages
* Voice options
* Lower turnover
* Lower profit
* Employees are more productive.
* Membership in unions has declined because the government has taken over certain things like safety and they don’t accommodate the types of jobs available. * Government Regulations
* Minimum wage
* Overtime laws
* Discrimination/affirmative Action
* Taxes & Subsidies
* Government spending.
* Why intervene?
* When the market provides an inefficient outcome when left to its own devices * When market solution offends our values
3. Employment Issues (3)
* Person doesn’t have a job
* Person would be able to take the job if offered
* Looked for work in previous 4 months
* Labor force- al non institutionalized people over the age of 16 who are either working for pay or actively seeking paid employment. * Unemployment rate
* # employed/ labor force
* Labor force participation rate:
* Labor force/adult population
* Types of Unemployment
* Frictional- normal; temporary as people...