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What does an upward-sloping labor supply curve indicate?
Higher wages lead to more people willing to work.
What does a downward-sloping labor demand curve indicate?
Higher wages lead to firms hiring less labor.
On a labor market graph, what does the equilibrium point represent?
The market wage rate and the quantity of labor employed where labor supply equals labor demand.
On a labor market graph, what does a point above the equilibrium represent?
A surplus of labor, where the quantity of labor supplied is greater than the quantity of labor demanded.
On a labor market graph, what does a point below the equilibrium represent?
A shortage of labor, where the quantity of labor demanded is greater than the quantity of labor supplied.
What does a rightward shift of the labor demand curve indicate?
An increase in labor demand, meaning firms are willing to hire more workers at any given wage.
What does a leftward shift of the labor demand curve indicate?
A decrease in labor demand, meaning firms are willing to hire fewer workers at any given wage.
What does a rightward shift of the labor supply curve indicate?
An increase in labor supply, meaning more workers are willing to work at any given wage.
What does a leftward shift of the labor supply curve indicate?
A decrease in labor supply, meaning fewer workers are willing to work at any given wage.
How does a minimum wage above the equilibrium wage appear on a labor market graph?
As a horizontal line above the equilibrium point, creating a surplus of labor (unemployment).
What is the impact of a minimum wage on the quantity of labor supplied?
A minimum wage increases the quantity of labor supplied.
What is the impact of a minimum wage on the quantity of labor demanded?
A minimum wage decreases the quantity of labor demanded.
What is the impact of stricter immigration laws on the labor market?
It decreases labor supply, potentially increasing wages and decreasing employment.
What is the impact of government funding for job training programs on the labor market?
It increases labor supply of skilled workers, potentially decreasing wages for those skills and increasing employment.
What is the impact of a wage ceiling on the labor market?
It creates a shortage of labor, where firms want to hire more workers than are willing to work at that wage.
How do government regulations making it harder to obtain a license affect the wage rate?
It increases the wage rate due to the decrease in labor supply.
What impact do government subsidies for education have on the labor market?
They increase the labor supply by increasing the number of qualified workers.
How do government policies that encourage early retirement affect the labor market?
They decrease the labor supply, potentially leading to higher wages and fewer workers.
What impact does a tax on labor have on employment?
It decreases employment by increasing the cost of labor for firms.
What is the impact of policies promoting flexible work arrangements (e.g., remote work) on labor supply?
They can increase labor supply by making it easier for people to participate in the workforce.
Define factor supply.
The amount of labor workers are willing and able to offer at different wage rates.
Define factor demand.
The amount of labor firms are willing and able to hire at different wage rates.
Define labor supply.
The amount of labor workers are willing and able to offer at different wage rates.
Define labor demand.
The amount of labor firms are willing and able to hire at different wage rates.
What is a surplus of labor?
When the wage is too high, more people want to work than firms want to hire, potentially due to a wage floor.
What is a shortage of labor?
When the wage is too low, firms want to hire more people than are willing to work, potentially due to a wage ceiling.
Define substitute resources.
Resources that firms can use in place of each other.
Define complementary resources.
Resources that are used together in the production process.
What is the wealth effect?
The phenomenon where increased wealth may cause people to work less.
Define Factor Market Equilibrium.
The point where labor supply meets labor demand, determining the market wage rate and quantity of labor employed.