copyright © 2009 pearson education, inc. chapter 2 overview of the labor market
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Copyright © 2009 Pearson Education, Inc.
Chapter 2
Overview of the Labor Market
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Figure 2.5: The Markets in which Firms Must Operate
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Labor Market Internal Labor Market Labor Force Out-of-Labor Force Labor Force Participation Rate Unemployment Rate Primary, Secondary, and Tertiary Sectors Pareto Efficiency
Important Definitions - Labor Markets
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Figure 2.1: Labor Force Status of the U.S. Adult Civilian Population, April 2007
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Table 2.1: Labor Force Participation Rates by Gender, 1950-2007
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Figure 2.2: Unemployment Rates for the Civilian Labor Force, 1946-2006
(detailed data in table on next slide)
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Unemployment Rates for the Civilian Labor
Force, 1946-2006 (Data displayed
Graphically in Figure 2.2)
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Figure 2.3: Employment Distribution by Major Nonfarm Sector, 1954-2007
(detailed data in table on next slide)
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Employment Distribution by Major Nonfarm Sector, 1954-2007
(data displayed graphically in Figure 2.3)
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Nominal Wages Real Wages Consumer Price Index Earnings Payments In Kind Deferred Payments Total Compensation Income
Important Definitions - Earnings of Labor
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Table 2.2: Nominal and Real Hourly Earnings, U.S. Nonsupervisory Workers
in the Private Sector, 1980-2006
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Figure 2.4: Relationship between Wages, Earnings, Compensation and Income
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Substitution Effect Scale Effect Change In Demand Change in Quantity Demanded Market, Industry, and Firm Labor Demand Long Run vs. Short Run Labor Demand
Important Definitions - The Demand for Labor
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Table 2.3: Labor Demand Schedule for a Hypothetical Industry
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Figure 2.6: Labor Demand Curve (based on Table 2.3)
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Figure 2.7: Shift in Demand for Labor Due to Increase in Product Demand
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Figure 2.8: Possible Shifts in Demand for Labor Due to Fall in Capital Prices
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Change in Quantity Supplied Change in Supply Comparable vs. Noncomparable Jobs Market Supply of Labor Supply of Labor to the Firm Wage Taker
Important Definitions - The Supply of Labor
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Figure 2.9: Market Supply Curve for Paralegals
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Figure 2.10: Shift in Market SupplyCurve for Paralegals as Salaries of
Insurance Agents Rise
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Figure 2.11: Supply of Paralegals to a Firm at Alternative Market Wages
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Equilibrium or Market Clearing Wage Disequilibrium Excess Demand and Excess Supply Nonmarket Influences on the Labor Market Collective Bargaining Agreement Economic Rent Reservation Wage
Important Definitions - Wage Determination
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Figure 2.12: Market Demand and Supply
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Figure 2.13: Demand and Supply at the “Market” and “Firm” Levels
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Figure 2.14: New Labor Market Equilibrium after Demand Shifts Right
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Figure 2.15: New Labor Market Equilibrium after Supply Shifts Left
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Figure 2.16: New Labor Market Equilibrium after Supply Shifts Right
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Figure 2.17: Effects of an Above-Market Wage
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Figure 2.18: Effects of a Below-Equilibrium Wage
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Figure 2.19: Labor Supply to the Military: Different Preferences Imply
Different “Rents”
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Table 2.4: Unemployment and Long-Term Unemployment, Selected European and
North American Countries, 2005
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