Term
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Definition
-the study of how people behave in strategic situations
-explains the strategies that people choose |
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Term
| Characteristics of oligopoly |
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Definition
-small group of sellers
- actions of any one seller in the market can have a large impact on the profits of all the other sellers |
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Definition
| an agreement among firms in a market about quantities to produce or prices to change |
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Definition
| a group of firms acting in unison |
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Term
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Definition
CHARACTERISTICS:
-a single buyer (employer) in an industry
-monopsonist faces the entire, upward-sloping market supply curve
-Monopsonists are “price” makers, but as Labor rises, Wage rises as well |
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Term
| Always the same on first row of the monopsony labor chart |
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Definition
-Q and MP(L)
-W, TVC, and MFC |
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Term
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Definition
GOALS:
-Maximize wages
-Maximize employment |
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Term
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Definition
-Increase in the D for output
Action: Advertise union-made
-Increase in members’ productivity
Action: Apprenticeship programs
-Increase in the price of substitute labor
Action: Lobby for minimum wage increases
- Decrease in the Ed for output
Action: Lobby for import restrictions
-Decrease the number of substitute inputs
Action: Lobby for more immigration laws |
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Term
| Factors that increase D for labor |
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Definition
-Increase in the D for output
-Increase in members’ productivity
-Increase in the price of substitute labor |
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Term
| Factors that decrease Εd of D for labor |
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Definition
-Decrease in the Ed for output
-Decrease the number of substitute inputs |
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Term
| How to find L* and W* on a monopsony graph |
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Definition
Find L* where MRPL = MFC
Go down from that point to the supply line to find W* |
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Term
DL = MRPL
-for both PC and monopsony |
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Definition
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Term
| How to find L* and W* on a PC graph |
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Definition
| Find where the S and D line cross |
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Term
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Definition
| The withholding of labor services by a labor union |
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Term
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Definition
| monopsony exploits labor force by paying them the lowest minimum wage possible and making lots of profit from the money made |
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Term
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Definition
| A group of workers organized to advance the interests of the group |
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Term
| Cartel firm: incentive to cheat |
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Definition
| -a single firm can make more profit than the other due to the firm holding a larger percentage of the market |
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Term
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Definition
| a condition in which an action by one firm may cause a reaction from other firms |
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Term
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Definition
-provides insight into why cooperation is difficult
-Because each pursues his or her own interests, the two prisoners together
reach an outcome that is worse for each of them. |
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Term
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Definition
| -a firm’s demand for a factor of production is derived from its decision to supply a good in another market |
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Term
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Definition
-the inability of some unregulated markets to allocate resources
efficiently.
-When markets fail, public policy can potentially remedy the problem and increase economic efficiency |
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Term
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Definition
| the study of strategy and how people make decisions when interacting in conflict with one another |
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Term
| Effects of hiring a worker |
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Definition
-raise wages to attract workers
-raise wages for current workers |
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Term
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Definition
-taxes on specific goods like gasoline,
cigarettes, and alcoholic beverages. -also includes various small items, such as estate taxes and customs duties |
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Term
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Definition
-a person who receives the benefit of a good but does not pay for it
-Because public goods are not
excludable, the free-rider problem prevents the private market from supplying them. |
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Term
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Definition
| you can not prevent people from using the good |
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Term
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Definition
| one person’s use of a public good does not reduce another person’s ability to use it |
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Term
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Definition
goods that are neither excludable nor rival in consumption
ex. tornado siren |
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