Human Capital Study Guide

Human Capital Study Guide - Human Capital Study Guide 1) 2)...

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Human Capital Study Guide 1) 2) Demand shifters: 1. consumer tastes 2. number of buyers 3. consumer income 4. price of related good 5. expected price Supply shifters: 1. price of good 2. price of resources 3. technology 4. prices of other goods produced 5. expected future prices 6. taxes and subsidies 7. number of suppliers 3) Marginal product of labor (MPL): change in total output of a good that results from a one-unit change in input Marginal revenue product: marginal product times the price of the product MRP = MP x P Optimal Labor Demand: point where the wage equals the expected marginal revenue product 4) Shifts in labor demand curve: a. Changes in labor productivity i. Increase in productivity = shift right ii. Decrease in productivity = shift left b. Changes in demand for the firm’s product i. Increase in demand = shift right ii. Decrease in demand = shift left Shifts in labor supply curve a. i. Increase in immigration/population = shift right ii. Decrease in immigration/population = shift left b. Number of hours people are willing to work i. People willing to work more hours for same wage = shift right ii. People willing to work less hours for same wage = shift left c. Non-wage income (i.e. hitting the lottery, other investments, etc.) i. Increase in non-wage income = shift left ii. Decrease in non-wage income = shift right d. i. Better job conditions (more amenities) = shift right ii. Worse job conditions (less amenities) = shift left
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5) Government can affect both the supply and demand for labor through: a. Minimum wage: can cause surpluses in labor supply which increases unemployment b. Overtime laws: must pay time and a half for overtime c. Discrimination/affirmative action: decreases unemployment rate for minorities; may increase unemployment for majorities d. OSHA e. Immigration f. Taxes and subsidies a. Progressive tax system: imposes higher marginal tax rates on higher incomes b. Subsidies: using government revenues to provide low-cost public services g. Governmental spending a. Government employees b. Government infrastructure 6) 7)   To be defined as unemployed a person must: a. not have a job. Not have a job and must have looked for work at some time. Not have a job and must be actively looking for work. Have a job but be looking for a different job. Be working less than their desired amount of time. 8) 9) Seasonal-   The result of a decrease in the demand for labor due to the changing of the season Frictional- The loss of work that occurs when workers change jobs or locations Structural- The result of major industrial or technological changes. A mismatch of skills. Cyclical- The result of movement through the business cycle; during expansions,
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Human Capital Study Guide - Human Capital Study Guide 1) 2)...

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