Labor Suppl3 - Labor Supply Terms Indifference Curve -...

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Labor Supply Terms Indifference Curve - Graphical representation of different combinations of goods and services that give a consumer equal utility or happiness. Labor market - A large group of firms and workers in the same industry: the firms want to hire workers, the workers want jobs. The interaction between the two groups determines the market wage and quantity of labor used. Market - A large group of buyers and sellers who are buying and selling the same good or service. Market-clearing Price - The price of a good or service at which quantity supplied is equal to quantity demanded. Also called the equilibrium price. Normal Good - A normal good is a good for which an increase in income causes an increase in demand, and vice versa. Optimization - To maximize utility by making the most effective use of available resources, whether they be money, goods, or other factors. Seller - Someone who sells goods and services to a buyer for money. Substitution Effect
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