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Terms Definitions
A wage reduction  ________isocost curve, holding constant initial cost outlay constant flattens
Higher isocost lines indicate ______costs higher
Profit equals Total Revenue - total costs
In a nondiscriminating monopsony, marginal cost of hiring ________ the wage, marginal cost curve lies ___________ the supply curve exceeds, above
In a nondiscriminating monopsony, the slpoe of the marginal cost curve is  ________ as steep as the supply curve twice
An employment subsidy _______the cost of hiring for firms lowers
Flattener 4. Open Sourcing Communities uploading and collaborating on online projects. Examples include open source software, blogs, and Wikipedia. Friedman considers the phenomenon "the most disruptive force of all."
the benifits of minimum wage  accrue mostly to workers who are not __________ in the distribution of permanent income low
The Isocost curve Indicates possable combinations of Labor and Capital the firm can hire given a specified budget
In a monopoly, a workers marginal revenue product is  _________ than his value of marginal product less
In labot market equalibrium, all persons can find a job at the _________ going wage
In a discriminating monopsony, each worker is paid his or her _______ reservation wage
Immagrants and natives are _________ in production perfect substitutes
A wage cut generates ______effects and _____effects substitution, scale
_________encourages a firm to expand, increasing the firm's employment The Scale effect
Capital and labor are ___________ if isoquant is linear. perfect substitutes
 The Isoquant curve describes the possible combinations of labor and capital that produce the same level of output
Total costs wages x Labor + rental price x Capital
A firm produces until output price equals Marginal Cost
Average Product the amount of output produced by typical worker
A minimum wage on a nondiscriminating monopsony __________ employment ans wages MAY increase
_________ is the condition when all possible gains from trade have been exhausted Pareto Efficiency
Flattener 7. Supply Chaining Friedman compares the modern retail supply chain to a river, and points to Wal-Mart as the best example of a company using technology to streamline item sales, distribution, and shipping.
As more units of labor and capital are hired, output... Increases
_________ encourages a firm to use more labor intensive method of production, further increasing employment The Substitution Effect
When an Isoquant is right angled, the inputs are called ___________ perfect compliments
A wage cut will ________ the marginal cost of production, encourages a firm to ________ reduce, expand
The curvature of the isoquant measures _____________ Elasticity of substitution
The cost of producing an additional unit of output (marginal cost) is equal to the revenue obtained from selling that output (marginal revenue)
The two kinds of monopsony markets are ______and ______ discriminating, nondiscriminating
Payroll subsidies shift demand curve for labor_______ down (to the right)
Labor market equalibrium  coordinates the desires of ______ and _______, determining the ______ and _______ firms, workers, wage, employement rate
A _______ is where there is one seller of labor Monopoly
Flattener 8. Insourcing Friedman uses UPS as a prime example for _______, in which the company's employees perform services--beyond shipping--for another company. For example, UPS repairs Toshiba computers on behalf of Toshiba. The work is done at the UPS hub, by UPS employees.
The slope of Total Product Curve The Marginal Product Of Labor
Labor Demand is more elastic when elasticity of substitution is ________, elasticity of demand for firms output is __________, the _________ labors share in total cost s of production, and the _______ supply elasticity of other factors of production. Greater, greater, greater, greater
A perfectly discriminating monopsonist will hire __________ workers as that of a competitive market, but at each workers' ________ the same amount of, reservation wage
 A worker's marginal revenue product is ___________ X ___________ marginal product , marginal revenue
A firms optimal combination of inputs Isocost line tangent to isoquant curve
The Marginal Product of Capital is:  

•the change in output resulting from hiring one additional unit of capital, holding constant the quantities of other inputs
The slope of the isoquant equals - wage rate / rental price
The Marginal Rate of Substitution equals the price ratio of capital to labor
Flattener 1. Collapse of the Berlin Wall The event not only symbolized the end of the Cold war, it allowed people from other side of the wall to join the economic mainstream.
In long run, if wages drop, a firm will take advantage of lower prices by __________ and _____________ expanding production ( scale effect ), rearranging mix of inputs ( substitution effect )
Variable adjustment costs encourage firms to adjust employment level at a _______ rate slower
Profit maximaztion also means cost minimization
A firms objective Maximize profit, minimize costs
A competitive market _________ gains from trade maximizes
Increases in immigration _______ wages and employment of natives reduces
In the long run, immigration _______ employment increases
As immagration increases, competing workers will have _______wages, complimentary workers will have ______ wages lower, higher
In a competitive labor market, equalibrium is attained at the point where_______equals _______ Supply, Demand
An affirmative action _______ a firm's cost increases
monopolists face a __________ market demand curve for its output downward sloping
A ______ is one buyer of labor Monopsony
Firms pay ______ the amount that workers pay as a result of payroll taxes equal
In a single competitive labor market, the market is always moving to __________, but it is unlikely that it is ever reached. equalibrium
_______ are firms that can influence the price of the product they sell Monopolies
In a pareto efficiency, to _________ one person's welfare will decrease another's welfare increase
Flattener 5. Outsourcing Friedman argues that outsourcing has allowed companies to split service and manufacturing activities into components which can be subcontracted and performed in the most efficient, cost-effective way.
The ________ effect is large when two imputs are perfect substitutes substitution
An increase in the price of output shifts the value of marginal product curve ______, so employment will _______. Upward, Increases
The profit maximizing firm should produce up to the point where: MC = MR
A firms production function is a combination of _________ and ________. Capital, Labor
Payroll taxes _______ the cost of employement, thereby _________ an economy's employment increase, decreasing
_________ markets exist when a firm is a lone buyer of labor Monopsony
When two labor markets are linked by migration, wages are ________ across regions equal
Flattener 10. The Steroids Personal digital devices like mobile phones, iPods, personal digital assistants, instant messaging, and voice over Internet Protocol
Labor Demand Curve indicates how firm reacts to wage changes
downward sloping because of diminishing marginal returns to labor
When firms hire more workers, output rises at decreasing rate
If cross elasticity of factor demand is positive, the two inputs are __________ substitutes in production
When two inouts can be substituted at a constant  rate, the imputs are called ____________ Perfect substitutes
A payroll tax assessed on a firm with inelastic supply is shifted completely to ________ workers
Payroll taxes assessed on employers lead to a _________ to the ________ downward shift, demand curve
Total product curve   The total product curve gives the relationship between output and the number of workers hired by the firm
__________ is the percentage change in capital to labor given a percentage change in the price ratio The elasticity of substitution
As immagrants enter the labor market, the supply curve _______, total employment ________, and the equalibrium wage ________ shifts right, increases, decreases
In a nondiscriminating monopsony, to attract more workers, a firm must __________, resulting in __________ employees then a competitive market raise all workers wages, fewer
Flattener 3. Workflow Software The ability of machines to talk to other machines with no humans involved. Friedman believes these first three forces have become a "crude foundation of a whole new global platform for collaboration."
Marginal productivity rule  hire labor up to the point when the added value of marginal product equals the added cost of hiring the worker
If workers were perfectly mobile and entry/exit to market was free, there would be a _________ single wage for all workers
A quick change in employment causes _______costs, these costs _____________ high, increase at an incresing rate
The Marginal Product of Labor is:  
•the change in output resulting from hiring an additional worker, holding constant the quantities of other inputs
 A minimum wage in sector 1 (covered) but not sector 2 (uncovered) causes employment to shift from _____ to _____, thereby _______ the uncovered sectors wage. sector 1, sector 2, lowering
The Long Run Demand Curve for Labor gives a firm's employment at a given wage, downward sloping
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