ADMS 1000 Study Guide - Midterm Guide: Unemployment, Business Cycle, Dominant Design
- Characterized by high barriers to entry such as capital costs.
- Price setters and characterized by fierce competition.
- Prices are close between companies.
Monopolistic
- Large number of companies compete, offering products and services that are
differentiated at least in a minor way.
Types of Unemployment
Frictional
- Is caused by normal labour market turnover, not a downturn in the economy.
- Employed workers who are laid off fall under this category too.
- Unlikely to disappear since people are constantly entering and exiting the labour force.
Cyclical
- Relates to pace of economy or business cycle.
- When economy slows down or is in recession, cyclical unemployment is high.
Structural
- Occurs for two reasons: either the available jobs do not correspond to the skills of the
labour force or unemployed individuals do not live in a region where jobs are available.
- Also shown where there is technological change where old jobs are discontinued and new
jobs created.
Seasonal
- Seasonal nature of job.
The Business Cycle
Expansion
- Economic activity is rising.
- Goods are being produced and sold, the workforce is expanding (that is, jobs are being
created), demand for goods is increasing, and the price of goods is rising.
- Can experience a sudden economic boom or slow and steady growth.
Peak
- Highest point.
- End of expansion and beginning of contraction.
Contraction
- Declining economy and falling profits.
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ADMS 1000 Full Course Notes
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