Studied by 1 personEarnings
________ differ among people in part because of differences in their human capital, an amalgam of personal characteristics that affect productivity.
Minimum wage laws
________ reduce total economic surplus by contracting employment.
Labor union
________: group of workers who bargain collectively with employers for better wages and working conditions.
Poverty threshold
________: level of income below which the federal government classifies a family as poor.
Winner take all labor market
________: one in which small differences in human capital translate into large differences in pay.
Customer discrimination
________: willingness of consumers to pay more for a product produced by members of a favored group, even if the quality of the product is unaffected.
negative income tax
The ________ is an expanded version of the earned- income tax credit that includes those who are not employed.
Employer discrimination
________: arbitrary preference by an employer for one group of workers over another.
Marginal product of labor (MP)
additional output a firm gets by employing one additional unit of labor
Value of marginal product of labor (VMP)
dollar value of the additional output a firm gets by employing one additional unit of labor
Human capital theory
theory of pay determination that says a worker's wage will be proportional to his or her stock of human capital
Human capital
amalgam of factors such as education, training, experience, intelligence, energy, work habits, trustworthiness, and initiative that affects the value of a worker's marginal product
Labor union
group of workers who bargain collectively with employers for better wages and working conditions
Compensating wage differential
difference in the wage rate (negative/positive) that reflects the attractiveness of a job's working conditions
Employer discrimination
arbitrary preference by an employer for one group of workers over another
Customer discrimination
willingness of consumers to pay more for a product produced by members of a favored group, even if the quality of the product is unaffected
Winner-take-all labor market
one in which small differences in human capital translate into large differences in pay
In-kind transfer
payment made not in the form of cash, but in the form of a good/service
Means-tested
benefit program whose benefit level declines as the recipient earns additional income
Negative income tax (NIT)
system under which the government would grant every citizen a cash payment each year, financed by an additional tax on earned income
Poverty threshold
level of income below which the federal government classifies a family as poor
Earned-income tax credit (EITC)
policy under which low-income workers receive credits on their federal income tax
Marginal product of labor (MP)
Additional output a firm gets by employing one additional unit of labor
Value of marginal product of labor (VMP)
Dollar value of the additional output a firm gets by employing one additional unit of labor
Human capital theory
Theory of pay determination that says a worker's wage will be proportional to his/her stock of human capital
Human capital
Amalgam of factors such as education, training, experience, intelligence, energy, work habits, trustworthiness, and initiative that affects the value of a worker's marginal product
Labor union
Group of workers who bargain collectively with employers for better wages and working conditions
Compensating wage differential
Difference in the wage rate (negative/positive) that reflects the attractiveness of a job's working conditions
Employer discrimination
Arbitrary preference by an employer for one group of workers over another
Customer discrimination
Willingness of consumers to pay more for a product produced by members of a favored group, even if the quality of the product is unaffected
Winner-take-all labor market
One in which small differences in human capital translate into large differences in pay
In-kind transfer
Payment made not in the form of cash, but in the form of a good/service
Means-tested
Benefit program whose benefit level declines as the recipient earns additional income
Negative income tax (NIT)
System under which the government would grant every citizen a cash payment each year, financed by an additional tax on earned income
Poverty threshold
Level of income below which the federal government classifies a family as poor
Earned-income tax credit (EITC)
Policy under which low-income workers receive credits on their federal income tax
Note 
Flashcard (130)