ECON 2020 Lecture Notes - Lecture 15: Corporate Bond, Market Power, Comparative Advantage
Document Summary
Supply of labor in industries non unionized will increase, lower wages. Inefficient, high union wages reduce employment in unionized firms below the efficient level. Inequitable, some workers benefit at expense of other workers. Necessary antidote to the market power of the firms that hire workers. In absence firms may pay less with less benefits. Above equilibrium wages paid by firms to increase worker productivity. Reduces turnover by paying them a higher wage. High wages make workers more eager to keep their jobs. Exchanging one good or service for another. Unlikely occurrence that two people each have a good or service that the other wants. People regularly use to buy goods and services from other people. Has value due to people"s confidence that others will accept money for other goods and services. Ease at which an asset can be converted into the economy"s medium of exchange.
