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economics

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the study of how people use their scarce resources to satisfy their unlimited wants

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resources

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the inputs or factors of production used to produce the goods and services that people want; resources consist of labor, capital, natural resources, and entrepreneurial abilityw

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labor

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the physical and mental effort used to produce goods and services

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capital

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the buildings, equipment and human skills used to produce goods and services

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physical capital

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factories, tools, machines computers, buildings, airports, highways, and other human creations

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human capital

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consists of the knowledge and skill people acquire to increase their productivity-your knowledge of economics, surgeons knowledge of anatomy

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natural resources

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all gifts of nature used to produce goods and services; includes renewable and exhaustible resources

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renewable resource

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can be drawn on indefinitely if used conservatively-timber, air, rivers

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exhaustible resource

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oil or coal because it does not renew itself and so is available in a limited amount

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entrepreneurial ability

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the imagination required to develop a new product or process the skill needed to organize production and the willingness to take the risk of profit or loss

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entrepreneur

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a profit-seeking decision maker who starts an idea, organizes an enterprise to bring that idea to life, and assumes the risk of operation

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wages

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payment to resource owners for their labor

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interest

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The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.

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rent

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payment to resource owners for the use of their natural resources

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profit

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reward for entrepreneurial ability; sales revenue minus resource cost

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good

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a tangible product used to satisfy human wants

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service

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an activity or intangible product used to satisfy human wants

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scarcity

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occurs when the amount of people desire exceeds the amount available at a zero price

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market

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a set of arrangements by which buyers and sellers carry out exchange at mutually agreeable terms

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product market

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a market in which a resource is bought and sold

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circule-flow model

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a diagram that traces the flow of resources, products, income, and revenue among economic decision makers

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Decision makers

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Households-consumers that demand the good/service & provide labor, capital, natural resources & entrepreneurial Firms, governments, and the rest of the world-demand the resources that households supply and then use these resources to supply the demand *their interaction determines how an economy's resources are allocated

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rational self-interest

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each individual tries to maximize the expected benefit achieved with a given cost or to minimize the expected cost of achieving a given benefit

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marginal

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incremental, additional or extra; used to describe a change in an economic variable

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economic choice

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based on a comparison of the expected marginal benefit and the expected marginal cost of the action under consideration

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microeconomics

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the study of your economic behavior and the economic behavior of others who make choices about such matters as how much to study and how much to party, how much to borrow/save

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macroeconomics

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studies the performance of the economy as a whole

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recession

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decline in production, employment, ect.

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economic fluctuations

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the rise and fall of economic activity relative to the long-term growth trend of the economy-vary in length and intensity

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economic theory

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make predictions about the real world

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positive economic theory

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a statement that can be proved or disproved by reference to facts

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normative economic statement

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a statement that reflects an opinion, which cannot be proved or disproved by reference to the facts

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association-is-fallacy

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the incorrect idea that if two variables are associated in time, one must necessarily cause the other

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fallacy of composition

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the incorrect belief that what is true for the individual or part must necessarily be true for the group or whole

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secondary effects

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unintended consequences of economic actions that may develop slowly over time as people react to events

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Functional relation

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exists between two variables when the value of one variable depends on the value of another

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dependent variable

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value depends on independent variable

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independent variable

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its value determines that of the dependent variable

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Direct relation

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Positive=occurs when two variables increase or decrease together; the two variables move in the same direction

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Inverse relation

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Negative=occurs when two variables move in opposite directions; when one increases the other decreases

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Slope

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y/x or rise over run; measure of how much the vertical variable changes for a given increase in the horizontal variable; the vertical change between two points divided by the horizontal increase

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tangent

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straight line that touches a curve at a point but does not cut or cross the curve; used to measure the slope of a curve at a point

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opportunity cost

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the value of the best alternative forgone when an item or activity is chosen--subjective--requires time (the ultimate constraint) and information and varies with circumstance

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sunk cost

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a cost that has already been incurred, cannot be recovered and thus is irrelevant for present and future economic decisions

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law of comparative advantage

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the individual, firm, region or country with the lowest opportunity cost of producing a particular good should specialize in that good

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absolute advantage

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the ability to make something using fewer resources than other producers use

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comparative advantage

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the ability to make something at a lower opportunity cost than other producers face

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barter

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products are traded directly for other products, no money

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division of labor

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breaking down the production of a good into separate tasks

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specialization of labor

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focusing work effort on a particular product or a single task, takes advantage of individual preferences and natural abilities, allows workers to develop more experience at a particular task, reduces the need to shift among different tasks, and permits the introduction of labor-saving machinery

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Production Possibility Frontier (PPF)

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a curve showing alternative combinations of goods that can be produced when available resources are used efficiently; a boundary line between inefficient and unattainable combinations. Slopes downward because more of one good means less of the other good-opp cost. It's bowed out shape reflects the law of increasing opportunity cost which arises because some resources are not perfectly adaptable to the production of each good. The outward shift shows economic growth

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efficiency

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the condition that exists when there is no way resources can be reallocated to increase the production of one good without decreasing the production of another; getting the most from available resources

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law of increasing opportunity cost

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to produce more of one good, a successively larger amount of the other good must be sacrificed

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economic growth

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an increase in the economy's ability to produce goods and services; reflected by an outward shift of the economy's ppf

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rules of the game

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informal and formal institutions that support the economy or the laws, customs, manners, conventions and other institutional underpinnings that encourage people to pursue productive activity

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economic system

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the set of mechanisms and institutions that resolve the what, how and for whom questions

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pure capitalism

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market system where there is no government, rules of game include private ownership of resources and the market distribution of products. markets answer the what, how and whom

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private property rights

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allow individual owners to use resources or to charge others for their use

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pure command system

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resources are directed and production is coordinated not by market forces but by the government, public or communal ownership of property

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mixed system

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an economic system characterized by the private ownership of some resources and the public ownership of other resources; some markets are regulated by gov.

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utility

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satisfaction received from consumption; sense of well-being

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proprietors

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people who work for themselves rather than for employers; farmers, plumbers and doctors are often self employed

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transfer payments

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cash such as welfare benefits, social security, unemployment compensation or in-kind benefits such as food, health care and housing given to individuals as outright grants from the government

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industrial revolution

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development of large-scale factory production that began in Great Britain around 1750 and spread to the rest of Europe, North America and Australia

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firms

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economic units formed by profit-seeking entrepreneurs who employ resources to produce goods and services for sale. they are able to reduce the cost per item created by contracting for several items--maximizes profit. organized as a sole proprietorship, partnership or corporation

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sole proprietorship

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sing-owner firm i.e.- self employed farmer, plumber, dentists. it's the most common type of business

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partnership

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involves two or more individuals who agree to combine their funds and efforts in return for a share of any profit or loss i.e.-law, accounting and medical partnerships

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corporation

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a legal entity established through articles of incorporation so shares of stock entitle stockholders to a claim on any profit. most influential form of business and easiest way to amass large sums to finance a business by pooling funds of investors

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realized capital gain

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any increase in the market price of a share that occurs between the time the share is purchased and the time it is sold

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S Corporation

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its a hybrid type of corporation evolved to take advantage of the limited liability feature of corporate structure and profits are taxed only one

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cooperative or "co-op"

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group of people who cooperate by pooling their resources to buy and sell more efficiently than they could independently, they try to minimize costs and operate with limited liability of members

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consumer cooperative

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retail business owned and operated by some or all of its customers in order to reduce costs

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producer cooperative

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producers join forces to buy supplies and equipment and to market their output (fed gov allows farmers to do so leg)

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not-for-profit organizations

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engage in charitable, educational, humanitarian, cultural, professional, and other activities often with a social purpose and don't try to maximize profits/minimize costs

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information revolution

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technological change spawned by the microchip and the internet that enhanced the acquisition, analysis, and transmission of information

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market failure

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a condition that arises when the unregulated operation of markets yields socially undesirable results

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antitrust laws

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prohibitions against price fixing and other anticompetitive practices

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monopoly

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a sole supplier of a product with no close substitutes

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collusion

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agreement among firms to divide the market and fix the price

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natural monopoly

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one firm that can supply the entire market at a lower per-unit cost than could one or more firms

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private good

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a good that is both rival in consumption and exclusive such as pizza

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public good

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a good that, once produced, is available for all to consume regardless of who pays and who doesn't such a good is non rival and nonexclusive such as a safer community

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externality

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a cost or a benefit that affects neither the buyer nor seller but instead affects people not involved in the market transaction

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fiscal policy

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the use of government purchases, transfer payments, taxes and borrowing to influence economy-wide variables such as inflation, employment and economic growth

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monetary policy

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regulation of the money supplied to influence economy wide variables such as inflation employment and economic growth

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Roles of Gov.

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-Prevent monopolies, provide public goods, transfer payments such as social security, welfare, health care, retirement, etc. also fiscal and monetary policy that regulate the government, antitrade laws and tariffs.

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Gross Domestic Product

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total value of all final goods and services produced in the United States

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ability to pay tax principle

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those with a greater ability to pay should pay more taxes

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benefits received tax principle

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those who get more benefits from the government programs should pay more taxes

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tax incidence

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the distribution of tax burden among taxpayers who ultimately pays the tax

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proportional taxation

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the tax as a percentage of income remains constant as income increases also called a flat tax

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progressive taxation

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the tax as a percentage of income increases as income increases

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marginal tax rate

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the percentage of each additional dollar of income that goes to the tax

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regressive taxation

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the tax as a percentage of income decreases as income increases

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merchandise trade balance= exported goods - imported goods

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the value during a given period of a country's exported goods minus the value of its imported goods

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balance of payments

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a record of all economic transactions during a given period between residents of one country and residents of the rest of the world

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foreign exchange

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foreign money needed to carry out international transactions

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tariff

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tax on imports

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quota

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a legal limit on the quantity of a particular product that can be imported or exported

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demand

answer

a relation between the price of a good and the quantity that consumers are willing and able to buy per period, other things constant

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law of demand

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the quantity of a good that consumers are willing and able to buy per period relates inversely or negatively to the price other things constant. low P=high D high P=low D

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substitution effect of a price change

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when the price of a good falls, that good becomes cheaper compared to other goods so consumers tend to substitute that good for other goods

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money income

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the number of dollars a person receives per period, such as $900 per week

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real income

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income measure in terms of the goods and services it can buy, real income changes when the price changes

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income effect of a price change

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a fall in the price of a good increases consumers' real income, make consumers more able to purchase goods; for a normal good, the quantity demanded increases

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demand curve

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a curve showing the relation between the price of a good and the quantity consumers are willing and able to buy per period other things constant. Slopes downward showing the the law of demand

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economic law

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relationship between quantity demanded and price

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quantity demanded

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the amount of a good consumers are willing and able to buy per period at a particular price, as reflected by a point on a demand curve

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individual demand

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the relation between the price of a good and the quantity purchased by an individual consumer per period other things constant

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market demand

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the relation between the price of a good and the quantity purchased by all consumers in the market during a given period, other things constant; sum of the individual demands in the market

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normal good

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a good, such as new clothes, for which demand increases or shifts rightward as consumer income rises

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inferior good

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a good such as used clothes for which demand decreases or shifts leftward as consumer income rises

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substitutes

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goods such as tacos and pizzas that relate in such a way that an increase in the price of one shifts the demand for the other rightward

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complements

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goods, such as Pepsi and pizza that relate in such a way that an increase in the price of one shifts the demand for the other leftward

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tastes

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consumer preferences; likes and dislikes in consumption; assumed to remain constant along a given demand curve

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movement along a demand curve

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change in quantity demanded resulting from a change in the prices of the good other things constant

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shift of a demand curve

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movement of a demand curve right or left resulting from a change in one of the determinants of demand other than the price of the good

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supply

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a relation between the price of a good and the quantity that producers are willing and able to sell per period, other things constant

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law of supply

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the amount of a good that producers are willing and able to sell per period is usually directly related to its price other things constant

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supply curve

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a curve showing the relation between price of a good and the quantity producers are willing and able to sell per period other things constant

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quantity supplied

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the amount offered for sale per period at a particular price as reflected by a point on a given supply curve

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individual supply

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the relation between the price of a good and the quantity an individual producer is willing and able to sell per period other things constant

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market supply

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the relation between the price of a good and the quantity all producers are willing and able to sell per period other things constant

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movement along a supply curve

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change in quantity supplied resulting from a change in the price of the good, other things constant

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shift of a supply curve

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movement of a supply curve left or right resulting from a change in one of the determinants of supply other than the price of the good

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transaction costs

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the costs of time and information required to carry out market exchange

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surplus

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at a given price, the amount by which quantity supplied exceeds quantity demanded a surplus usually forces the price down

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shortage

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at a given price, the amount by which quantity demanded exceeds quantity supplied, a shortage usually forces the price up

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equilibrium

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the condition that exists in a market when the plans of buyers match those of sellers so quantity demanded equals quantity suppled and the market clears

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Determinants of Demand

answer

1. Tastes 2. Number of consumers 3. Price of related goods 4. Income 5. Expectations

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Determinants of Supply

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1. technological breakthrough 2. price of a resource 3. price of another good 4. supplier expectations 5. number of suppliers

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disequilibrium

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the condition that exists in a market when the plans of buyers do not match those of sellers; a temporary mismatch between quantity supplied and quantity demanded as the market seeks equilibrium

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price floor

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a minimum legal price below which a product cannot be sold; to have an impact, a price floor must be set above the equilibrium price

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price ceiling

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a maximum legal price above which a product cannot be sold; to have an impact, a price ceiling must be set below the equilibrium price

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price elasticity of demand

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% change in quantity demanded/% change in price measures how responsive quantity demanded is to a price change

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price elasticity formula: % change in quantity demanded / % change in price

answer

the average quantity and the average price are used as bases for computing percentage changes in quantity and price

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inelastic demand Ed;1

answer

a change in price has relatively little effect on quantity demanded; the percentage change in quantity demanded is less than the percentage change in price; the resulting price elasticity has an absolute value less than 1.0

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unit elastic demand Ed=1

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the percentage change in quantity demanded equals the percentage change in price; the resulting price elasticity has an absolute value of 1.0

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elastic demand Ed;1

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A change in price has a relatively large effect on quantity demanded; the percentage change in quantity demanded exceeds the percentage change in price; the resulting price elasticity has an absolute value exceeding 1.0

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total revenue

answer

Price X Quantity demanded= TR

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linear demand curve

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straight-line demand curve; such a demand curve has a constant slope but usually has a varying price elasticity

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perfectly elastic demand curve Ed;1

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a horizontal line reflecting a situation in which any price increase would reduce quantity demanded to zero; the elasticity has an absolute value of infinity

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perfectly inelastic demand curve

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a vertical line reflecting a situation in which any price change has no effect on the quantity demanded; the elasticity value is zero

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unit-elastic demand curve

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everywhere along the demand curve, the percentage change in price causes an equal but offsetting percentage change in quantity demanded so total revenue remains the same; the elasticity has an absolute value of 1.0

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constant elasticity demand curve

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the type of demand that exists when price elasticity is the same everywhere along the curve; the elasticity value is unchanged

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price elasticity of supply

answer

measure the responsiveness of quantity supplied to a price change; % change in quantity/% change in price

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inelastic supply Es ;1.0

answer

a price change has relatively little effect on the quantity supplied % change quantity ; % change price

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unit-elastic supply price elasticity of supply=1.0

answer

% change in quantity=% change in price

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elastic supply Es;1.0

answer

a price change has a relatively large effect on quantity supplied; % change in quantity; % change in price

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perfectly elastic supply curve Es=infinity

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a horizontal line reflecting a situation in which any price decrease drops the quantity supplied to zero;

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perfectly inelastic supply curve Es=0

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a vertical line reflecting a situation in which a price change has no effect on the quantity suppled;

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unit-elastic supply curve Es=1

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a percentage change in price causes an identical percentage change in quantity supplied; depicted by a supply curve that is a straight line from the origin

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income elasticity of demand

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% change in demand/ % change in consumer income the value is positive for normal goods and negative for inferior goods

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cords-price elasticity of demand

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% change in the demand of one good/% change in the price of another good it's positive for substitutes, negative for complements and zero for unrelated goods

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total utility

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the total satisfaction you derive from consumption; this could refer to either your total utility of consuming a particular good or your total utility from all consumption

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marginal utility

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the change in your total utility from a one-unit change in your consumption of a good

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if a good is free

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you increase consumption as long as marginal utility is positive

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law of diminishing marginal utility

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the more of a good a person consumes per period, the smaller the increase in total utility from consuming one more unit, other things constant

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consumer equilibrium MU MU /P = /P

answer

the condition in which an individual consumer's budget is exhausted and the last dollar spent on each good yields the same marginal utility; therefore, utility is maximized

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in equilibrium

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the last dollar spent on each good yields the same marginal utility; higher priced goods yield more marginal utility than lower priced goods

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marginal valuation

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the dollar value of the marginal utility derived from consuming each additional unit of a good

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consumer surplus

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the most a costumer would pay for a given quantity of a good (-) what the consumer actually pays

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consumption

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has a money price and a time price

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explicit cost

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the opportunity cost of resources employed by a firm that takes the form of cash payments

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implicit cost

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a firm's opportunity cost of using its own resources or those provided by its owners without a corresponding cash payment

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accounting profit

answer

a firm's total revenue - explicit costs

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economic profit

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a firm's total revenue - explicit cost - implicit costs

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normal profit

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accounting profit earned when all resources earn their opp cost

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variable resource

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any resource that can be varied in the short run to increase or decrease production

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fixed resource

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any resource that cannot be varied in the short run

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long run

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a period during which all resources under the firm's control are variable

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short run

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a period during which at least one of a firm's resources is fixed

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law of diminishing marginal returns

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as more of a variable resource is added to a given amount of other resources, marginal product eventually declines and could become negative

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total product

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a firm's total output

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production function

answer

the relationship between the amount of resources employed and a firm's total product

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marginal product

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the change in total product that occurs when the use of a particular resource increases by one unit, all other resources constant

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increasing marginal returns

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the marginal product of a variable resource increases as each additional unit of that resource is employed

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fixed cost

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any production cost that is independent of the firm's rate of output

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variable cost

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any production cost that changes as the rate of output changes

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total cost

answer

FC + VC =TC

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marginal cost

answer

change TC/ change Q

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when the firm experiences increasing marginal returns the marginal cost of output falls

answer

when the firm experiences diminishing marginal returns, the cost of output increases

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Average variable cost

answer

AVC=VC/Q

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Average total cost

answer

ATC=TC/Q ATC= AFC+AVC

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Economies of Scale

answer

forces that reduce a firm's average cost as the scale of operation increases in the long run

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diseconomies of scale

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forces that may eventually increase a firm's average cost as the scale of operation increases in the long run

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long run average cost curve

answer

a curve that indicates the lowest average cost of production at each rate of output when the size or scale of the firm varies also called the planning curve

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in the short run

answer

increasing and diminishing returns from the variable resource

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in the long run

answer

it's economies and diseconomies of scale

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constant long run average cost

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a condition that occurs if, over some range of output, long run average cost neither increases nor decreases with changes in firm size

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minimum efficient scale

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the lowest rate of output at which a firm takes full advantage of economies of scale

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Perfectly competitive market market price = marginal revenue = average revenue

answer

1. many buyers and sellers 2. firms sell a commodity or standard product 3.buyers and sellers are fully informed about the price and availability of resources and products 4. firms and resources are freely mobile or can easily enter or leave the industry

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market structure

answer

important features of a market such as the number of firms, product uniformity across firms, firms ease of entry and exit, and forms of competition

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perfect competition

answer

a market structure with many fully informed buyers and sellers of a standardized product and no obstacles to entry or exit of firms in the long run; the profit max-MC=MR, marginal revenue is market price

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commodity

answer

a standardized product, a product that does not differ across producers such as a bushel of wheat or an ounce of gold

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price taker

answer

a firm that faces a given market price and whose quantity supplied has no effect on that price; a perfectly competitive firm that decides to produce must accept or take the market price

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marginal revenue

answer

the firm's change in total revenue from selling an additional unit; a perfectly competitive firm's marginal revenue is also the market price

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golden rule of profit maximization

answer

to max profit or min loss, a firm should produce the quantity at which marginal revenue = marginal cost

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average revenue

answer

TR/Q in all market structures, Average Rev=Market Price

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short run firm supply curve

answer

a curve that shows how much a firm supplies at each price in the short run, in perfect competition that portion of a firm's marginal cost curve that intersects and rises above the low point on its average variable cost curve

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short run industry supply curve

answer

a curve that indicates the quantity supplied by the industry at each price in the short run; in perfect competition the horizontal sum of each firm's short run supply curve

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long run industry supply curve

answer

a curve that shows the relationship between price and quantity supplied by the industry once firms adjust in the long run to any change in market demand

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constant cost industry

answer

an industry that can expand or contract without affecting the long run per-unit cost of production, the long run industry supply curve is horizontal

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increasing cost industry

answer

an industry that faces higher per unit production costs as an industry output expands in the long run; the long run industry supply curve slopes upward

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producer efficiency

answer

the condition that exists when production uses the least cost combo of inputs; min average cost in long run

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allocative efficiency MB = MC

answer

the condition that exists when firms produce the output most preferred by consumers; marginal benefit

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producer surplus

answer

a bonus for producers in the short run; the amount by which total revenue from production exceeds variable cost

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barriers to entry

answer

legal restrictions, economies of scale and control of an essential resource

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patent

answer

a legal barrier to entry that grants the holder the exclusive right to sell a product for 20 years from the date the patent app is filed

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innovation

answer

the process of turning an invention into a marketable product

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natural monopoly

answer

one that emerges from economies of scale

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artificial monopoly

answer

forms by government patents, licenses and other legal barriers to entry

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monopolist's output=market demand

answer

therefore demand curve slopes downward and is also average revenue curve

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monopolist's price=average total rev per unit

answer

they can set the price but determines the quantity

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marginal revenue is less than the price or average revenue for a monopoly

answer

because MR=P-loss

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demand=inelastic, MR=negative--TR decreases as the price falls

answer

demand=elastic, MR=positive--TR increases as the price falls

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price maker

answer

a firm with some power to set the price because the demand curve for its output slopes downward

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profit max for a monopoly is where MC intersects MR curve

answer

monopoly produces where TR>TC by greatest amount

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if price cover AVC monopolist produces, at least in the short run

answer

if not, the monopolist shuts down, at least in the short run

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for monopolies economic profit can persist in long run cuz barriers that block new entry and competition

answer

but a monopoly unable to erase a loss will leave the market in long run

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deadweight loss of monopoly

answer

net loss to society when a firm with market power restricts output and increases the price

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rent seeking

answer

activities undertaken by individuals or firms to influence public policy in a way that increases their income

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price discrimination

answer

increasing profit by charging different groups of consumers different prices for the same product

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perfectly discriminating monopolist

answer

charges a different price for each unit sold, also called the monopolist dream

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CHAPTER 10

answer

p.163

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monopolistic competition

answer

market structure with many firms selling products that are substitutes but different enough that each firm's demand curve slopes downward; firm entry is relatively easy. Firms are price makers not takers, can enter and exit with ease cuz barriers are low--earn zero economic profit in the long run, product=commodity

question

excess capacity

answer

the difference between a firm's profit maximizing quantity and the quantity that minimizes average cost; firms with excess capacity could reduce average cost by increasing quantity

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oligopoly

answer

a market structure characterized by so few firms that each behaves interdependently, barriers to entry are higher especially economies of scale

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undifferentiated oligopoly

answer

an oligopoly that sells a commodity that does not differ across suppliers like steel or oil

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differentiated oligopoly

answer

sells products that differ across suppliers, automobiles or breakfast cereals (physical qualities, sales locations, services offered with product, image of product)

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collusion

answer

an agreement among firms to increase economic profit by dividing the market and fixing the price

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cartel

answer

group of firms that agree to coordinate their production and pricing to reap monopoly profit they produce less charge more and block new firms to earn more profit

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price leader

answer

a firm whose price is matched by other firms in the market as a form of tactic collusion

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derived demand

answer

demand that arises from the demand for the product the resource produces

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resource market

answer

firms are demanders and households are suppliers, any diff between the profit-max goals of firms and utility max goals of households are sorted out through voluntary exchange

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economic rent

answer

portion of resource's total earnings that exceeds its opportunity cost, earnings greater than the amount required to keep the resource in use

question

resource supply curve is vertical and perfectly inelastic all earnings are economic rent

answer

when supply curve is horizontal or perfectly elastic all earnings are opportunity cost

question

marginal revenue product

answer

MP of the resource X product P

question

marginal resource cost

answer

the change in total cost when an additional unit of a resource is hired

question

resource substitutes

answer

resources that substitute in production an increase in the price of one resource increases the demand for the other

question

resource compliments

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resources that enhance one another's productivity so a decrease in the price of one resource increases the demand for the other

question

firm hires additional workers until

answer

marginal revenue product=marginal resource cost

question

two things can change a resources marginal product

answer

1. change in amount of other resources employed 2. change in technology

question

market work

answer

time sold as labor

question

nonmarket work

answer

time spent getting an education or on do-it-yourself production for personal consumption

question

leisure

answer

time spent on non work activities

question

substitution effect of a wage increase

answer

a higher wage encourages more work because other activities now have a higher opportunity cost

question

income effect of a wage increase

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a higher wage raises a worker's income, increasing the demand for all normal goods, including leisure so the quantity of labor supplied in the market work decreases

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backward-bending supply curve of labor

answer

as the wage rises, the quantity of labor supplied may eventually decline; the income effect of a higher wage increases the demand for leisure, which reduces the quantity of labor supplied enough to more than offset the substitution effect of a higher wage

question

labor union

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a group of workers who organize to improve their terms of employment

question

craft union

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a union whose members have a particular skill or work at a particular craft, such as plumbers or carpenters

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industrial union

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a union consisting of both skilled and unskilled workers from a particular industry, such as all autoworkers or all steelworkers

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collective bargaining

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the process by which union an management negotiate a labor agreement

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mediator

answer

an impartial observer who helps resolve differences between union and management

question

binding arbitration

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negotiation in which union and management must accept an impartial observer's resolution of a dispute

question

strike

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a union's attempt to withhold labor from a firm to halt production

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featherbedding

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union efforts to force employers to hire more workers than demanded at a particular wage

question

right-to-work states

answer

states where workers in unionized companies do not have to join the union or pay union dues

Economics Chapter 1-11 – Flashcards

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