ECON 102 Midterm 4 Study Guide

A set of vocabulary flashcards to help understand key economic concepts related to labor markets, monopoly, and production factors for the ECON 102 Midterm.

Factors of Production

The resources used to produce goods and services, comprising Labor, Physical Capital, and Land.

Derived Demand

The demand for labor that depends on the demand for the goods and services produced.

Marginal Product of Labor (MPL)

The additional output produced by one more unit of labor.

Value of Marginal Product of Labor (VMPL)

The monetary value of the additional output produced by one more unit of labor, calculated as MPL multiplied by the price of output.

Labor Demand Curve

A graphical representation of the relationship between the quantity of labor demanded by firms and the wage rate.

Compensating Wage Differentials

Wage premiums paid to workers for taking on undesirable or risky job conditions.

Taste-Based Discrimination

Discrimination based on personal prejudice against a group.

Statistical Discrimination

Decision making based on group characteristics as proxies for individual productivity.

Natural Monopoly

A monopoly that exists due to economies of scale, leading to lower costs for a single producer compared to multiple producers.

Price Discrimination

The practice of charging different prices to different consumers or for different amounts of a product.

Deadweight Loss

The loss of total surplus that occurs when the quantity of a good produced is not at the socially optimal level.

Antitrust Policy

Regulations designed to promote competition and prevent monopolistic practices.

Human Capital

The skills and knowledge that workers bring to the job.

Market Power

The ability of a firm or individual to influence the market price of a product.