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When a majority of people rely on a single economic resource, what is the likely outcome?
When a majority of people rely on a single economic resource, what is the likely outcome?
Scarcity and shortages of that resource.
What can happen to the price of a resource when everyone wants to use it?
What can happen to the price of a resource when everyone wants to use it?
It increases.
How does relying on a single resource affect the economy?
How does relying on a single resource affect the economy?
It makes the economy vulnerable to fluctuations in the supply of that resource.
What is a potential consequence of over-reliance on a single resource?
What is a potential consequence of over-reliance on a single resource?
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Why is it beneficial to diversify economic resources?
Why is it beneficial to diversify economic resources?
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What is the primary goal of measuring labor productivity?
What is the primary goal of measuring labor productivity?
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Which of the following is a key factor that can increase labor productivity?
Which of the following is a key factor that can increase labor productivity?
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What is the concept that suggests investments in education and training increase workers' productivity and earning potential?
What is the concept that suggests investments in education and training increase workers' productivity and earning potential?
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In a labor market, what is the equilibrium wage rate?
In a labor market, what is the equilibrium wage rate?
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What is the primary difference between labor productivity and multifactor productivity?
What is the primary difference between labor productivity and multifactor productivity?
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In a labor market, what determines the labor supply?
In a labor market, what determines the labor supply?
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What is the term for the study of the labor market and the behavior of workers and firms within it?
What is the term for the study of the labor market and the behavior of workers and firms within it?
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Which labor market model assumes that many firms and workers interact, leading to a single market wage and equilibrium?
Which labor market model assumes that many firms and workers interact, leading to a single market wage and equilibrium?
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Study Notes
Economic Resource Utilization
- When a majority of people use only one specific economic resource, it leads to scarcity of that resource.
- This scenario can result in economic inefficiencies, as the intense demand for the resource drives up its price.
- The over-reliance on a single resource can also hinder innovation, as the focus is on exploiting the existing resource rather than exploring alternative options.
- Furthermore, this can lead to uneven distribution of wealth, as those who control the resource tend to accumulate more wealth and power.
Labor Productivity
Definition
- Labor productivity measures the output of goods and services per unit of labor input.
Key Factors Affecting Labor Productivity
- Technological advancements increase labor productivity by reducing time and effort required to produce a given output.
- Human capital investments in education and training enhance workers' skills and abilities, leading to increased labor productivity.
- Organizational efficiency improvements in management practices, workflow, and workplace organization contribute to increased labor productivity.
- Capital deepening increases in the capital-to-labor ratio lead to higher labor productivity.
Measurement of Labor Productivity
- Output per hour measures the output of goods and services per hour of labor input.
- Output per worker measures the output of goods and services per worker.
- Multifactor productivity measures the output of goods and services per unit of combined labor and capital inputs.
Labor Economics
Definition
- Labor economics is the study of the labor market and the behavior of workers and firms within it.
Key Concepts
- Labor supply is the number of hours or workers willing to work at a given wage rate.
- Labor demand is the number of hours or workers that firms are willing to hire at a given wage rate.
- Equilibrium wage is the wage rate at which the labor supply equals labor demand.
- Human capital theory states that investments in education and training increase workers' productivity and earning potential.
Labor Market Models
- Perfect competition is a model in which many firms and workers interact, leading to a single market wage and equilibrium.
- Monopsony is a model in which a single firm has market power, allowing it to influence the wage rate.
- Monopoly is a model in which a single firm has market power, allowing it to influence the price of goods and services.
Labor Market Issues
- Unemployment occurs when workers are able and willing to work, but cannot find employment.
- Discrimination is the practice of treating workers unfairly based on characteristics such as race, gender, or age.
- Labor unions are organizations that represent workers' interests and negotiate with firms on their behalf.
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Description
Why is labor the main economic resource?
