Economics Regulations and Labor Market Concepts

This set of flashcards covers key economic terms and concepts related to regulation, market structures, labor, and union dynamics to aid in exam preparation.

What is regulation in economics?

Government rules or laws designed to control or influence business behavior to protect consumers, promote fair competition, and reduce negative externalities.

What are the four key elements that define market structure?

Number of producers, similarity of products, ease of market entry, level of competition.

What is perfect competition?

A market with many sellers offering identical products where none control price.

What are the characteristics of perfect competition?

Many buyers/sellers, standardized product, easy entry/exit, informed buyers, independent actions, price takers.

What is imperfect competition?

A market where firms have some control over price; includes monopolies, monopolistic competition, and oligopolies.

Define monopoly.

A market with one firm controlling everything, no close substitutes, and high barriers to entry.

What are the four types of monopolies?

Natural, government, technological, geographic.

Give an example of each type of monopoly.

Natural - utility company; Government - USPS; Technological - patent holder; Geographic - only gas station in town.

What is monopolistic competition?

Many sellers offer similar but not identical products, with product differentiation and some price control.

What is non-price competition?

Competing through branding, advertising, service, design, etc., instead of price.

What is an oligopoly?

A market dominated by a few large firms with interdependent behavior and high entry barriers.

Define market share.

A firm's portion of total industry sales.

What are start-up costs?

Expenses needed to enter a market; higher in monopolies and oligopolies.

What is price fixing?

Agreement between firms to set prices, eliminating competition.

What is market allocation?

Firms divide markets to avoid competing with each other.

What is predatory pricing?

Setting prices low to drive competitors out of the market.

What are cease & desist orders?

Legal orders to stop unfair business practices.

What is public disclosure in consumer protection?

Requiring businesses to reveal product information (e.g., nutrition labels).

What is deregulation?

Reducing or removing government controls over an industry.

What is labor productivity?

The value of goods/services a worker produces in a given time.

What is the price of labor?

Wage.

What is equilibrium wage?

Wage rate where quantity of labor supplied equals labor demanded.

What is derived demand in labor?

Labor demand depends on demand for what labor produces.

What is human capital?

Skills, education, and experience a worker brings to a job.

Give examples of human capital levels.

Unskilled - house cleaners; Semi-skilled - construction; Skilled - plumbers; Professional - doctors.

What is wage discrimination?

Unequal pay based on gender or race.

What is the glass ceiling?

Invisible barrier preventing advancement of women/minorities.

What is minimum wage?

The lowest legal hourly wage for most workers.

Name 4 factors that affect wage rates.

Human capital, working conditions, discrimination, government policies.

What is the civilian labor force?

People aged 16+ working or actively looking for work.

What are the 3 economic sectors and examples?

Primary - farming/fishing; Secondary - factories/construction; Tertiary - retail/healthcare.

What is outsourcing?

Sending jobs to foreign companies.

What is insourcing?

Foreign companies creating jobs in the U.S.

What is telecommuting?

Working from home using digital communication.

What is contingent employment?

Temporary or part-time work.

What is an independent contractor?

A self-employed individual hired for specific tasks.

Why do many businesses prefer part-time jobs?

Cheaper benefits, flexible scheduling, easier hiring, high turnover roles.

What is a labor union?

An organized group of workers aiming to improve pay and working conditions.

What is a strike?

Workers refuse to work to demand better conditions or pay.

What is a closed shop?

Requires workers to join the union before being hired (mostly illegal now).

What is a union shop?

Requires joining the union after being hired.

What are right-to-work laws?

Laws that prevent mandatory union membership.

What is collective bargaining?

Negotiation between employers and unions.

What is binding arbitration?

A third party settles a dispute legally between employer and union.

Name 3 key events in labor history.

Haymarket Riot (1886), Homestead Strike (1892), Pullman Strike (1894).

What law protected workers' rights to unionize?

National Labor Relations Act (1935).

What law created minimum wage and banned child labor?

Fair Labor Standards Act (1938).

What law limited union power during national emergencies?

Taft-Hartley Act (1947).

Why has union membership declined?

Fewer factory jobs, rise of temp work, public distrust.

Are unions still influential today?

Yes, through collective bargaining and arbitration (e.g., teachers' unions).

Market Structure

Is an economic model that allows economists to examine competition among businesses in the same industry