by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is Imperfect Competition in Labor Markets?There are probably more examples of perfectly competitive labor markets than perfectly competitive product markets, but that doesn’t mean that all labor markets are competitive.When a job applicant is bargaining with an...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is Labor Demand in Perfectly Competitive Markets?The question for any firm is how much labor to hire.We can define a Perfectly Competitive Labor Market as one where firms can hire all the labor they wish at the...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
How does a Minimum Wage act as a Price Floor in the Labor Market?In contrast to goods and services markets, price ceilings are rare in labor markets, because rules that prevent people from earning income are not politically popular. There is one exception: boards of...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
How does Technology affects Demand for Labor? Economic events can change the equilibrium salary (or wage) and quantity of labor. Consider how the wave of new information technologies, like computer and telecommunications networks, has affected low-skill and high-skill...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What Causes Shifts in the Supply Labor?The supply of labor is upward-sloping and adheres to the law of supply: The higher the price, the greater the quantity supplied and the lower the price, the less quantity supplied. The supply curve models the tradeoff between...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What Causes Shifts in the Demand for Labor?The demand curve for labor shows the quantity of labor employers wish to hire at any given salary or wage rate, under the ceteris paribus assumption. A change in the wage or salary will result in a change in the quantity...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Equilibrium Wage?At equilibrium, the quantity supplied and the quantity demanded are equal. Thus, every employer who wants to hire at this equilibrium wage can find a willing worker, and every nurse who wants to work at this equilibrium salary can find a...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
How do Price, Supply, and Demand in the Labor Market?Markets for labor have demand and supply curves, just like markets for goods. The law of demand applies in labor markets this way: A higher salary or wage—that is, a higher price in the labor market—leads to a...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Government Regulation of Insurance?The U.S. insurance industry is primarily regulated at the state level. Since 1871 there has been a National Association of Insurance Commissioners that brings together these state regulators to exchange information and...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is The Adverse Selection Problem?Adverse selection refers to the problem in which insurance buyers have more information about whether they are high-risk or low-risk than the insurance company does. This creates an asymmetric information problem for the insurance...
