A labor market with only one employer, such as a remote town with a single coal company, is called a monopsony.
Missing Word
monopsony
A monopsony is a market with a single buyer, here a single buyer of labor. With no rival employers, it can hire fewer workers and pay lower wages than a competitive market would.
Category: Monopsony
Question 2
A union is an organization of workers that bargains as a group with employers over wages, benefits and working conditions.
Missing Word
union
A union replaces individual bargaining with group bargaining, giving workers market power on the supply side of the labor market.
Category: Unions
Question 3
The factor payment received by owners of land and buildings who let others use them is called rent.
Missing Word
rent
Rent is the income earned from property that others use. Like wages for labor, it is set in its own factor market.
Category: Factor Payments
Question 4
People who lend financial capital, such as by buying bonds or keeping savings accounts, receive a factor payment called interest.
Missing Word
interest
Interest is the payment for the use of borrowed financial capital, just as wages are the payment for labor.
Category: Factor Payments
Question 5
Owners of corporate stock may receive a share of the firm's profits as payments called dividends.
Missing Word
dividends
Dividends are profit distributions paid to shareholders, one of the returns earned by owning financial assets.
Category: Factor Payments
Question 6
Salespeople are often paid commissions, which are earnings based on a share of the value of the sales they make.
Missing Word
commissions
Commissions are a form of labor income tied directly to sales, alongside wages, salaries and tips.
Category: Factor Payments
Question 7
In a perfectly competitive output market, the value of the marginal product of labor equals the marginal product of labor times the output price.
Missing Word
price
A competitive firm can sell every unit at the market price, so multiplying a worker's extra output by that price gives the dollar value of the worker to the firm.
Category: Demand for Labor
Question 8
Economists define discrimination in the labor market as paying unequal wages to workers who have the same education, experience and skill because of race, gender, religion, age or disability.
Missing Word
discrimination
Discrimination is unequal treatment based on group traits that have nothing to do with productivity. To measure it, economists compare workers whose education, experience and skills are alike, so that any remaining pay gap is not explained by those traits.
Category: Employment Discrimination
Question 9
Economists use the term productivity for the amount of output a worker produces in an hour, and gains in it are one explanation for the higher pay of workers whose wages are set by collective bargaining.
Missing Word
productivity
Productivity measures output per hour of work. Union members in the United States earn more on average than similar nonunion workers, and one explanation is that union workplaces are more productive, for example because workers quit less and gain more experience on the job.
Category: Unions
Question 10
In a perfectly competitive labor market, the wage settles at equilibrium, the level at which the quantity of labor demanded equals the quantity of labor supplied.
Missing Word
equilibrium
Equilibrium is the point where the labor demand and labor supply curves cross. Above it, more people want jobs than employers want to fill; below it, employers want more workers than are willing to work, so the wage moves toward the crossing point.
Category: Labor Market Equilibrium
Question 11
When consumers buy fewer of the goods a group of workers makes, the demand curve for that labor shifts to the left.
Missing Word
left
The demand for labor is a derived demand: firms hire workers because of the output they produce. When demand for that output falls, each worker's output is worth less to the firm, so the labor demand curve shifts to the left, lowering wages and employment.
Category: Demand for Labor
Question 12
Redlining, the historical practice of denying loans to people in neighborhoods with many minority residents, helped concentrate Black families in areas with under-resourced schools.
Missing Word
Redlining
Redlining is a form of housing discrimination. By limiting where families could buy homes, it affected school quality and, through education, later earnings.
Category: Employment Discrimination
Question 13
New equipment that raises how much each worker can produce shifts the labor demand curve for those workers to the right.
Missing Word
right
A firm's demand for labor is based on the value of each worker's marginal product. Equipment that makes each worker produce more raises that value at every level of employment, so the labor demand curve shifts to the right.
Category: Demand for Labor
Question 14
In the early 1900s, more than 90 percent of immigrants to the United States came from Europe.
Missing Word
Europe
Europe supplied the great majority of U.S. immigrants in the early twentieth century. By the end of the century, most immigrants came from the Americas and Asia instead.
Category: Immigration
Question 15
When a higher market wage draws more people into an occupation, the result is a movement along, not a shift of, the labor supply curve.
Missing Word
supply
The labor supply curve shows how many people are willing to work in an occupation at each wage. A change in the wage moves the market along this curve; only a change in some other factor, such as required training or the number of people in the labor force, shifts it.
Category: Labor Market Equilibrium